It’s Time To Buy Into The Schlumberger 'Supercycle'
MarketBeat.com | Jan 25, 2022 06:55AM ET
The analysts are driving shares of Schlumberger (NYSE:SLB) higher and we think this is just the beginning of a very long trend. The entire oil industry is supported by fundamental factors that should keep them busy and prices high for the foreseeable future and no one is better positioned to capture industry strength than Schlumberger. The oilfield services company is already in high demand and forecasting what it calls the next oil supercycle, a supercycle driven by rising demand and tight supply.
CEO Olivier Le Peuch said:
“The industry macro fundamentals are very favorable due to the combination of projected steady demand recovery, an increasingly tight supply market, and supportive oil prices … Absent any further COVID-related disruption, oil demand is expected to exceed prepandemic levels before the end of the year and to further strengthen in 2023. These favorable market conditions are strikingly similar to those experienced during the last industry supercycle, suggesting that resurgent global demand-led capital spending will result in an exceptional multiyear growth cycle.”
As for the results, the company reported $6.22 billion in net revenue for a gain of 12.5% over last year. This is still down on a two-year basis but beat the Marketbeat.com consensus estimate by 210 basis points with momentum clearly building within the industry. More importantly, the adjusted EPS of $0.41 is up on a two-year basis and near a record level.
h2 Analysts Up Their Price Targets For Schlumberger/h2Schlumberger’s Q4 results and outlook for 2022 were so robust the analysts have begun to raise their targets again and the targets have been on the rise for the last year. So far there have been 4 price target increases that amount to a consensus of $43.50 compared to the Marketbeat.com broad consensus of $36.94. The Marketbeat.com consensus assumes about 6% of upside for the stock and it has been rising steadily for the last 12 months, up 80% from 1 year and nearly 6% in the last month alone.
This matches the trending higher i nto the end of the year.
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