Schlumberger (SLB) Beats Market Returns: Some Facts to Consider

Schlumberger (SLB) ended the recent trading session at $43.63, demonstrating a change of +1.47% from the previous day’s closing price. That move outpaced the S&P 500’s 0.77% daily gain. At the same time, the Dow gained 0.49% and the tech-heavy Nasdaq gained 0.95%.

Shares of the world’s largest oilfield services company posted a loss of 11.5% from the previous month, trailing the performance of the Oil-Energy sector with a loss of 7.24% and the S&P 500’s gain of 3 .71%.

Investors will be eagerly watching Schlumberger’s performance when it next releases its earnings. The company is expected to report EPS of $0.83, an increase of 15.28% from the same quarter a year ago. Meanwhile, our most recent consensus estimate is calling for revenue of $9.07 billion, up 12.03% from the equivalent quarter last year.

For the full year, Zacks Consensus Estimates suggest analysts expect earnings of $3.51 per share and revenue of $37.18 billion. These totals would mark changes of +17.79% and +12.21%, respectively, from last year.

Investors might also notice recent changes in analyst estimates for Schlumberger. These revisions help show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.

Our research shows that these estimate changes are directly correlated to near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and provides a clear, actionable scoring model.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), has a remarkable, externally audited track record of outperformance, with #1 stocks generating an average annual gain of +25% since 1988 Over the past 30 days, the Zacks Consensus EPS estimate has remained unchanged. Schlumberger currently holds a Zacks Rank of #3 (Hold).

From a valuation perspective, Schlumberger currently trades hands at a forward P/E ratio of 12.25. Its industry sports an average Forward P/E of 16.35, so one might conclude that Schlumberger is trading at a discount in comparison.

Investors should also note that SLB currently has a PEG ratio of 0.83. Comparable to the widely accepted P/E ratio, the PEG ratio also takes into account the company’s projected earnings growth. The Oil & Gas – Field Services sector held an average PEG ratio of 0.87 as of yesterday’s closing price.

The Oil & Gas – Field Services industry is part of the Oil & Energy sector. Currently, this industry holds a Zacks Rank of 149, putting it in the bottom 41% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our distinct industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and more, on Zacks.com.

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