Schlumberger's Earnings Estimates Revised Down, Stock Rated Zacks Rank #5

Schlumberger (SLB) has seen its stock return -8.3% over the past month, compared to the S&P 500's +0.5% change. The company's earnings estimate for Q1 has been revised down -11.4% over the last 30 days, and the consensus estimate for the current fiscal year has changed -5.2%. The Zacks Rank for SLB is #5 (Strong Sell) due to the size of the recent change in the consensus estimate and other factors related to earnings estimates.

Schlumberger Limited (SLB), a leading oilfield services company based in Houston, Texas, has been experiencing a challenging period in the stock market. Over the past month, the company's stock has returned -8.3%, significantly underperforming the S&P 500's +0.5% gain [1].

The company's earnings estimate for the first quarter (Q1) has been revised down -11.4% over the last 30 days, and the consensus estimate for the current fiscal year has decreased -5.2%. These revisions have contributed to a Zacks Rank of #5 (Strong Sell) for SLB, reflecting the substantial change in the consensus estimate and other related factors [4].

Despite these setbacks, Schlumberger's financial performance has shown some resilience. For the second quarter (Q2) of 2025, the company's top-line revenue dropped 6.5% year-over-year to $8.5 billion, while its adjusted earnings per share (EPS) decreased by 12.9% to $0.74. However, these results exceeded consensus estimates by 1.4% [1]. Notably, the company's operating cash flows for the first half of the year increased by 2.2% year-over-year to $1.8 billion, offering some optimism for investors [1].

Market analysts have mixed expectations for Schlumberger's full fiscal 2025 performance, projecting an adjusted EPS of $2.88, which reflects a 15.5% decline from the previous year. However, the stock maintains a consensus "Strong Buy" rating, with 15 out of 23 analysts recommending it as a "Strong Buy," highlighting the potential for a turnaround [1, 2].

Schlumberger's recent strategic partnership with Chevron to re-enter Iraq's oilfields has signaled renewed U.S. interest in the region's energy sector. While this deal could reshape regional supply chains, it may face near-term execution risks due to geopolitical uncertainties. The success of this partnership will hinge on regulatory approvals and operational timelines, which could influence SLB's earnings visibility in the coming quarters [3].

The company's mean price target of $46.56 suggests a potential 36.3% upside, while the highest target of $64.50 indicates an 88.8% growth potential, offering hope for investors anticipating a recovery [1, 2]. However, the recent strategic partnership and mixed Q2 results have led to a dip in stock prices, followed by positive momentum over subsequent trading sessions.

In conclusion, Schlumberger's stock performance has been mixed, with significant revisions to earnings estimates contributing to a "Strong Sell" rating. However, the company's financial performance and strategic partnerships offer some optimism for investors. As the market continues to evolve, it will be crucial to monitor Schlumberger's progress and the impact of its strategic initiatives.

References:
[1] https://www.indexbox.io/blog/schlumbergers-stock-market-challenges-and-future-prospects/
[2] https://www.barchart.com/story/news/33769089/are-wall-street-analysts-bullish-on-schlumberger-stock
[3] https://www.ainvest.com/news/schlumberger-shares-drop-2-22-high-volume-strategy-outperforms-benchmark-137-53-236th-trading-rank-0-56-billion-dollar-session-2508/
[4] https://finance.yahoo.com/quote/SLB/analysis/