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On Wednesday, Stifel analysts maintained their Buy rating on shares of Schlumberger Limited (NYSE:SLB), with a steady price target of $31.95. According to InvestingPro data, the stock is currently trading near its 52-week low of $31.52, with technical indicators suggesting oversold conditions. The firm's analysis suggests that Schlumberger's financial estimates may face less risk compared to its industry counterpart Halliburton Company (NYSE:HAL), which also holds a Buy rating but with a current share price of $19.26.
The analysts highlighted Schlumberger's robust international presence, noting that 81% of its projected 2024 revenue is expected to come from outside North America, in contrast to Halliburton's 58%. This significant international exposure is deemed an advantage for Schlumberger, potentially offering a buffer against market fluctuations more commonly experienced by North American-centric operations. The company's strong international strategy has contributed to a solid 9.52% revenue growth over the last twelve months, with total revenue reaching $36.29 billion.
Stifel's commentary pointed out Schlumberger's history of generating strong free cash flow (FCF), a key indicator of financial health and efficiency. InvestingPro analysis reveals an impressive FCF yield of 9% and a healthy current ratio of 1.45, indicating strong liquidity. The analysts believe that this track record, combined with the company's substantial international operations, positions Schlumberger as potentially more resilient than many of its peers in the oil service sector.
The firm's reiteration of the Buy rating and price target reflects confidence in Schlumberger's ability to navigate the market environment effectively. The maintained price target of $31.95 underscores the analysts' ongoing positive outlook for the stock's performance.
Investors in the oil services industry often monitor the balance between North American and international market exposure as a factor in assessing company resilience and growth potential. Schlumberger's international revenue mix is seen as a strategic advantage in this context, as highlighted by Stifel's analysis.
In other recent news, SLB announced a significant drilling contract with Woodside (OTC:WOPEY) Energy for the Trion development project offshore Mexico. This contract includes the delivery of 18 ultra-deepwater wells over three years, set to commence in early 2026. Jefferies financial firm recently adjusted its outlook on SLB, lowering the price target to $59 from $60 while maintaining a Buy rating. Similarly, RBC Capital Markets reduced its price target for SLB to $55 from $57, but kept an Outperform rating, highlighting SLB as a top pick in the US Oilfield Services sector. SLB is also undergoing a business restructuring, which includes a new performance function and continued workforce reductions as part of a cost-saving initiative. The company recorded $237 million in severance charges in 2024, reflecting its ongoing restructuring efforts. Additionally, SLB is focusing on digital and integration margins following recent acquisitions, as noted by analysts. These developments come amidst broader market concerns about energy demand due to global economic conditions.
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