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Investing.com - UBS maintained its Buy rating and $44.00 price target on SLB (NYSE:SLB) on Monday, highlighting the oil services company’s digital business as a key driver for future growth. The stock, currently trading at $33.55 and near its 52-week low, appears undervalued according to InvestingPro analysis.
The investment firm sees increasing value in SLB’s digital operations, particularly following the anticipated closing of the CHX and Palliser transactions in the second half of 2025, which could lead to more detailed revenue and margin disclosures for the unit.
UBS estimates that SLB’s New Tech Digital Platform, which includes DELFI and LUMI technologies, could be valued between approximately $6.1 billion and $16.1 billion, compared to the company’s projected year-end 2025 enterprise value of about $58 billion.
This valuation suggests that just 2-3% of SLB’s estimated 2026 revenue could represent 10-25% of the company’s total enterprise value, underscoring the significant impact of the digital segment.
UBS expects SLB to provide more detailed information and unit disclosures as the New Tech division continues to drive corporate revenue growth and margin expansion, potentially creating a positive catalyst path for the stock to achieve a higher valuation multiple.
In other recent news, SLB’s anticipated second-quarter earnings report has drawn attention, with Jefferies projecting an EBITDA of approximately $2.02 billion and revenue around $8.5 billion. These figures are expected to remain flat compared to the previous quarter, as noted by Jefferies, which has also lowered its price target on SLB to $53 while maintaining a Buy rating. The closing of the CHX acquisition and guidance for the second half of the year are highlighted as key investor focus areas. Meanwhile, JPMorgan has reiterated its overweight rating on SLB, acknowledging a slight decrease in EBITDA due to an unfavorable activity mix. In technology advancements, SLB has launched Electris™, a new suite of electric well completions technologies aimed at improving production and reducing costs. Additionally, SLB has secured an EPCI contract for the Ginger project offshore Trinidad and Tobago, marking the first award under a global agreement with bp. Stifel has also adjusted its price target for SLB to $54, maintaining a Buy rating, citing strong first-quarter results and a robust financial outlook for 2025.
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