SLB (SLB) , a global oilfield services firm, has announced a collaboration with the British energy giant Shell plc (SHEL) . Under this partnership, SLB will deploy the Petrel subsurface software across Shell’s global asset base. The Petrel subsurface software, developed by SLB, is a powerful tool for exploration and production that enables its users to analyze subsurface data and gain more information about the reservoir.The software will be aimed at enhancing Shell’s digital competencies. The adoption of t ...

SLB's Zacks Rank & Key Picks Currently, SLB carries a Zack Rank #3 (Hold). Investors interested in the energy sector may look at some better-ranked stocks like Archrock Inc. (AROC) , NextDecade Corporation (NEXT) and W&T Offshore, Inc. (WTI) . While Archrock presently sports a Zacks Rank #1 (Strong Buy), NextDecade and W&T Offshore carry a Zacks Rank #2 (Buy) each. You can see the complete list of today's Zacks #1 Rank stocks here. Archrock is an energy infrastructure company based in the United States with ...

Core Insights - The article discusses Schlumberger's strategic growth prospects, capital returns to shareholders, and attractive valuation, despite the stock declining by 3.5% since the last coverage [2]. Group 1: Company Overview - Schlumberger is highlighted for its focus on strategic growth and capital returns to shareholders, indicating a commitment to enhancing shareholder value [2]. Group 2: Market Performance - The stock of Schlumberger has experienced a decline of 3.5% since the last analysis, suggesting that the market has not yet aligned with the positive growth thesis presented [2].

Group 1 - The focus is on growth and dividend income as a strategy for retirement planning [1] - The portfolio is structured to generate monthly dividend income that grows through reinvestment and annual increases [1] - The author holds long positions in several major companies including XOM, NVDA, AMZN, META, and GOOGL [1]

Company Performance - Schlumberger's stock closed at $39.08, reflecting a -1.86% change from the previous session, underperforming the S&P 500's daily loss of 1.22% [1] - Over the last month, Schlumberger's shares decreased by 0.85%, outperforming the Oils-Energy sector's loss of 3.38% and the S&P 500's loss of 2.31% [1] Upcoming Earnings - The upcoming earnings disclosure is anticipated, with projected earnings per share (EPS) of $0.74, indicating a 1.33% decrease from the same quarter last year [2] - Revenue is expected to be $8.63 billion, reflecting a 0.84% decline from the same quarter last year [2] Annual Estimates - For the annual period, earnings are estimated at $3.38 per share and revenue at $38.63 billion, showing shifts of -0.88% and +6.45% respectively from the previous year [3] - Recent changes in analyst estimates suggest evolving short-term business trends, with positive revisions indicating analyst optimism regarding the company's profitability [3] Valuation Metrics - Schlumberger's Forward P/E ratio is currently 11.78, which is a discount compared to its industry's Forward P/E of 13.9 [6] - The PEG ratio stands at 9.42, significantly lower than the average PEG ratio of 1.66 for the Oil and Gas - Field Services industry [6] Industry Context - The Oil and Gas - Field Services industry is part of the Oils-Energy sector, holding a Zacks Industry Rank of 140, placing it in the bottom 45% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Group 1 - The article emphasizes a favorable risk versus reward perspective for potential investments, particularly highlighting the methodology that attracts successful investors [1] - There is an indication of a potential long position in SLB, suggesting a positive outlook on the stock's future performance [1] Group 2 - The disclosures mention that past performance does not guarantee future results, indicating a cautious approach to investment recommendations [2] - The article clarifies that no specific investment advice is being provided, and the views expressed may not represent the entire platform's stance [2]

Group 1 - Oil prices have maintained the $70 per barrel mark for WTI, with Brent crude slightly higher, indicating a stable market environment in early 2025 [1] - The Oil Volatility Index (OVX) has shown a decrease, reflecting a level of calmness in the energy sector [1] Group 2 - The article emphasizes the importance of analyzing macro drivers of various asset classes, including stocks, bonds, commodities, currencies, and crypto [1]

Core Viewpoint - SLB is undergoing a significant internal reorganization, including workforce reduction, to enhance operational efficiency and financial stability amid concerns of an oversupplied oil market [1][5]. Group 1: Restructuring Initiatives - SLB is establishing a new performance function led by a chief performance officer, integrating various operational aspects such as security and global business services [2]. - The company has incurred $237 million in severance costs in 2024 due to restructuring efforts, with personnel updates expected by the end of the quarter [3]. - As of February 2024, SLB employed approximately 111,000 people, indicating a substantial workforce that may be impacted by the ongoing reorganization [3]. Group 2: Market Conditions and Strategic Moves - The restructuring reflects a strategic response to potential oversupply in the oil market and a cautious spending approach by industry players [5]. - SLB continues to operate in Russia despite U.S. sanctions, although revenues from this region are declining, highlighting the geopolitical challenges faced by the company [4]. - The proactive restructuring aims to optimize efficiency and align with shifting business conditions, enhancing value for stakeholders [4].

Group 1: Project Overview - SLB, in collaboration with Aker Solutions, has secured a contract from Hafslund Celsio to implement a carbon capture solution at Norway's largest waste-to-energy plant in Klemetsrud, Oslo, as part of Norway's Longship CCS initiative [1][4] - The contract encompasses the installation of a carbon capture plant, liquefaction system, temporary storage, and ship-loading infrastructure at Oslo harbor, with the facility expected to capture 350,000 metric tons of CO2 annually [2][5] Group 2: Economic Feasibility and Industry Impact - The CEO of SLB Capturi emphasized the importance of standardization and modularization in enhancing the economic feasibility of carbon capture projects, suggesting that this project could set a global benchmark for industrial decarbonization [3] - Aker Solutions' CEO noted the project's significance in advancing Norway's CCS industry, highlighting the necessity of collaboration between public and private sectors to establish a sustainable carbon capture value chain [4] Group 3: Timeline and Expectations - The project is anticipated to be operational by the third quarter of 2029, representing a crucial step toward achieving Norway's climate goals [5]

Revenue and Operations - Non-US operations accounted for approximately 85% of consolidated revenue in 2024, 84% in 2023, and 2022[63]. - Russia represented approximately 4% of worldwide revenue during 2024, with net assets in Russia valued at approximately $0.6 billion as of December 31, 2024[65]. - Approximately 70% of SLB's revenue in 2024 was denominated in US dollars, while a significant portion of expenses outside the US was incurred in foreign currencies[173]. Geopolitical and Regulatory Risks - The company faces risks from geopolitical instability, which could adversely affect demand for products and services[63]. - The company suspended new investments and technology deployment in Russia in March 2022 and halted shipments of products into Russia in July 2023[65]. - Compliance with complex and frequently changing laws and regulations could have a material adverse effect on financial condition[75]. - Existing or future regulations to limit greenhouse gas emissions may reduce demand for the company's products and services[78]. Financial Management and Currency Risks - A 10% appreciation in the US dollar from December 31, 2024 market rates would decrease the unrealized value of SLB's forward contracts by $121 million, while a 10% depreciation would increase it by $133 million[176]. - At December 31, 2024, SLB had forward contracts for the US dollar equivalent of $10.0 billion in various foreign currencies, with $4.5 billion related to hedges of debt balances denominated in currencies other than the functional currency[177]. - SLB's foreign currency risk management strategy includes using derivative instruments to hedge against currency fluctuations, which is essential for managing the impact of changes in foreign exchange rates on earnings[175]. Sustainability and Environmental Risks - The transition of the global energy sector to include renewable energy sources could affect customer expenditure levels[60]. - The company must adapt its technology portfolio to address the energy transition and develop low-carbon technologies[67]. - SLB's sustainability goals, including net-zero emissions targets, expose the company to operational, reputational, financial, and legal risks, as achieving these goals is subject to numerous factors beyond its control[86]. - Severe weather events, potentially exacerbated by climate change, have historically affected SLB's operations and financial results, leading to increased operating costs or decreased revenue[89]. - Environmental compliance costs and liabilities due to stringent regulations could materially impact SLB's financial condition and operations[81]. Competitive Landscape and Technology - The energy industry is highly competitive, and failure to maintain technology leadership could adversely affect market share and pricing[72]. - Cybersecurity incidents could materially affect the company's reputation and financial condition[68]. Acquisition Risks - The proposed acquisition of ChampionX may not be completed due to failure to obtain required regulatory approvals, which could adversely affect SLB's stock price and result in costs related to the acquisition[84]. - If the acquisition of ChampionX is completed, the success will depend on SLB's ability to combine its business with ChampionX to realize anticipated synergies and growth opportunities[85]. Human Resources - The company faces risks related to attracting and retaining qualified personnel, which is critical for its operations and could increase costs during periods of high demand[88].