Citi reiterates Buy rating on SLB stock with $46 price target

Investing.com - Citi has reiterated its Buy rating on SLB (NYSE:SLB) with a price target of $46.00, despite the stock dropping 4% on Friday. The stock, currently trading at $33.32, has declined 8% in the past week and is now trading near its 52-week low.

The research firm believes the negative market reaction reflects investors discounting a lower fourth-quarter EBITDA compared to company guidance, following what could be viewed as a conservative second-half forecast from management. According to InvestingPro data, 13 analysts have recently revised their earnings estimates downward for the upcoming period.

Citi suggests this negative revision cycle appears to be in its final stages after significant drops in major markets including the U.S., Saudi Arabia, and Mexico, with consensus estimates now aligning with the firm’s 2026 EBITDA projections.

The stock is currently trading at approximately 6.6 times Citi’s 2026 EBITDA estimate and offers a roughly 10% free cash flow yield, which the firm views as undervalued given the company’s prospects.

Citi expects SLB’s EBITDA growth to resume next year, driven by deal synergies and digital initiatives, potentially leading to increased investor interest in the stock toward the end of the year.

In other recent news, SLB has reported its second-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $0.74, slightly above the forecasted $0.73. The company’s revenue reached $8.55 billion, exceeding predictions of $8.52 billion. SLB’s acquisition of ChampionX was completed, with expectations of $400 million in annual pre-tax synergies. Analyst firms, including Stifel and Jefferies, have maintained their Buy ratings on SLB, with price targets of $52 and $53, respectively, following the company’s modest earnings beat. Stifel highlighted SLB’s resilience and focus on maximizing production from existing assets, while Jefferies noted the importance of SLB’s integration of ChampionX and APS Canada divestment. BofA Securities also reiterated its Buy rating, citing attractive risk/reward for medium to long-term investors despite oil market concerns. These developments indicate SLB’s strategic positioning and potential for growth amid challenging market conditions.

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