SLB stock holds Buy rating at Stifel after in-line Q2 results

Investing.com - SLB (NYSE:SLB) maintained its Buy rating from Stifel, which reiterated its $52.00 price target following the oil services company’s second-quarter earnings report. According to InvestingPro analysis, SLB appears undervalued, with the stock trading at an attractive P/E ratio of 11.2x and showing strong financial health metrics.

SLB reported second-quarter revenue that was 0.3% above Stifel’s estimate, while adjusted EBITDA exceeded the firm’s forecast by 0.8%. Earnings per share came in at $0.74, beating expectations by one cent.

Stifel noted that despite near-term industry challenges, SLB’s management highlighted the resilience of its diverse portfolio and expects to deliver industry-leading margins compared to peers.

The recent closing of SLB’s acquisition of CHX was viewed positively by Stifel, particularly given the current environment where customers are exercising capital discipline and focusing on maximizing production from existing assets.

Stifel considers the risk/reward profile favorable for medium to long-term investors, citing SLB’s focus on generating and returning cash to shareholders as a key positive factor.

In other recent news, Schlumberger NV, now known as SLB, reported its second-quarter 2025 earnings, exceeding analysts’ expectations. The company posted an earnings per share of $0.74, slightly above the predicted $0.73, and achieved revenue of $8.55 billion, surpassing the anticipated $8.52 billion. SLB also completed the acquisition of ChampionX, which is expected to bring $400 million in annual pre-tax synergies. Jefferies has reiterated its Buy rating on SLB, maintaining a price target of $53.00, noting the company’s modest earnings beat as a positive sign.

The acquisition of ChampionX is anticipated to enhance SLB’s production systems portfolio and geographical reach, particularly in North America. For the second half of 2025, SLB projects revenue between $18.2 billion and $18.8 billion, with expectations of a performance boost towards the end of the year. Analysts from Jefferies are particularly interested in SLB’s management commentary regarding customer caution and its implications for industry activity levels.

SLB’s integration of ChampionX is expected to be accretive to margins and earnings per share by 2026, with significant synergies anticipated from supply chain and operational efficiencies. Despite the positive earnings report, SLB’s stock experienced a decline in pre-market trading, reflecting broader market sentiments. Nonetheless, the company remains optimistic about future opportunities, driven by energy market fundamentals.

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