Analyst: Schlumberger Is A Strong Oilfield Stock In Down Markets
With the shares of Schlumberger Limited. (NYSE: SLB) trading just 4 percent above their 2016 lows, an analyst at SunTrust Robinson Humphrey said the weakness is a buying opportunity.
The Analyst
Analyst Ken Sill upgraded shares of Schlumberger from Hold to Buy and maintained an $80 price target.
The Thesis
Schlumberger shares tend to outperform the Philadelphia Oil Service Index in periods of weakness, Sill said in a Tuesday note. The company offers an excellent place to weather current weakness in energy and the broader market, the analyst said.
The oilfield services provider is not immune to first-quarter weather-related delays in completions and disruptions to sand supplies, Sill said. The disruption of sand supplies had knock-on effects on other product lines as well as pressure pumping, the analyst said.
SunTrust expects the sand supply disruptions to be mitigated by increasing in-basin sand supplies in the Permian over the next few quarters.
To reflect the weather impact, SunTrust lowered its adjusted earnings per share estimates for Q1 from 41 cents to 35 cents and for the full year from $2.15 to $1.98. The firm also lowered its 2019 EPS and EBITDA estimates.
The Price Action
Schlumberger shares have lost about 19 percent over the past year.
At the time of publication, the shares were nearly flat at $63.45.
Related Links:
Double-Digit Growth Fuels Schlumberger's 20% Upside
BofA Weighs In On Oil Services, Upgrades Schlumberger And Baker Hughes
Latest Ratings for SLB
Apr 2018 | SunTrust Robinson Humphrey | Upgrades | Hold | Buy |
Feb 2018 | Bank of America | Upgrades | Neutral | Buy |
Feb 2018 | Griffin Securities | Upgrades | Neutral | Buy |
View More Analyst Ratings for SLB
View the Latest Analyst Ratings
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