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Investing.com - SLB (NYSE:SLB), a $47.12 billion energy services giant with a GOOD financial health score according to InvestingPro, has completed its acquisition of CHX, the company announced Thursday, following regulatory approvals from competition authorities in the UK and Norway.
The transaction, initially announced in April 2024, was finalized after resolving reviews from the UK’s Competition and Markets Authority and the Norwegian Competition Authority this week. Under the terms of the deal, CHX shareholders received a conversion rate of 0.735-1 SLB per CHX share.
UBS analyst Josh Silverstein reiterated a Buy rating on SLB with a $45.00 price target following the acquisition news. UBS estimates the conversion will result in approximately 140 million additional SLB shares.
SLB previously announced a target of approximately $400 million in annual pre-tax synergies from the acquisition. The company is expected to provide more details on the pro-forma outlook during its earnings call scheduled for Friday.
UBS identified the potential spinoff of SLB’s Digital Unit as the next key catalyst for the company, noting that New Tech Digital’s estimated 2-3% of SLB’s projected 2026 revenue could represent 10-25% of SLB’s total enterprise value.
In other recent news, Schlumberger has received approval from the UK’s Competition and Markets Authority for its proposed all-stock acquisition of ChampionX. This regulatory clearance was the final condition needed for the merger, which is set to close soon, with ChampionX becoming a wholly owned subsidiary of Schlumberger. ATB Capital Markets upgraded Schlumberger’s stock rating from Sector Perform to Outperform, citing benefits from the merger and the anticipation of increased earnings guidance for the third quarter of 2025. UBS maintained its Buy rating on Schlumberger, emphasizing the potential growth of the company’s digital business, which could significantly impact its enterprise value.
Meanwhile, Jefferies adjusted its price target for Schlumberger to $53 from $54, maintaining a Buy rating as the company prepares to release its second-quarter earnings report. Jefferies projects second-quarter revenue of approximately $8.5 billion, with earnings per share expected to be around $0.72, noting steady performance despite market challenges. The firm highlighted the importance of the upcoming earnings report, particularly the integration of ChampionX and its impact on future revenue and margins. Investors are also keenly watching for updates on Schlumberger’s digital business strategy and global activity trends, especially in regions like Saudi Arabia and Latin America. These developments mark significant steps in Schlumberger’s strategic growth and operational focus.
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