Stock Analysis | Schlumberger Outlook - A Cautious Technical Picture Amid Optimistic Fundamentals

Schlumberger Outlook - A Cautious Technical Picture Amid Optimistic Fundamentals

Market Snapshot: Schlumberger (SLB) is showing a mixed profile: fundamentals remain strong with a solid score, but technical signals suggest caution due to bearish momentum.

News Highlights

Recent news impacting the energy and construction sectors includes:

• Michigan Energy Partnership: Two large energy companies are committing to sourcing more equipment locally in Michigan, aiming to boost manufacturing and job creation in the energy space. This could indirectly benefit Schlumberger as a key energy services provider.
• Herc Holdings Acquires H&E Equipment: Herc Holdings has finalized its tender offer for H&E Equipment Services, with the merger expected to close on June 2, 2025. While this deal focuses on construction and equipment services, it highlights ongoing consolidation in the sector, which could influence Schlumberger’s peers and market dynamics.
• China’s New Energy Momentum: A foreign media delegation visited Jinan, China, to explore new developments in green energy, including battery-swap technology for vehicles. This reinforces the global shift toward clean energy, which aligns with Schlumberger’s long-term strategic focus in oilfield services for cleaner energy solutions.

Analyst Views & Fundamentals

Analysts are generally optimistic about Schlumberger. The simple average analyst rating is 5.00, and the performance-weighted rating is 4.44. These ratings are fairly consistent with each other, though there is some variability among analysts.

Despite the recent price increase of 2.86% in the last 5 days, both the average and weighted ratings show positive expectations. However, there are some differences in the level of enthusiasm among analysts, with ratings ranging from "Strong Buy" to more cautious views.

Key fundamental factors include:

• Net Profit Margin (NPM): 12.26% (Internal diagnostic score: 8.78)
• Return on Assets (ROA): 2.15% (Internal diagnostic score: 8.74)
• EV/EBIT: 30.02 (Internal diagnostic score: 5.29)
• Net Income / Revenue: 32.85% (Internal diagnostic score: 8.93)
• Basic Earnings Per Share (YoY Growth Rate): -13.07% (Internal diagnostic score: 4.97)

These figures highlight a company with strong profitability and asset efficiency, though earnings growth is currently negative. The overall fundamental score is 4.71, reflecting a balanced performance across key financial metrics.

Money-Flow Trends

Big-money investors are currently showing a negative overall trend in fund flows, with inflow ratios for large, extra-large, and medium-sized blocks all below 0.5. The block inflow ratio is 0.48, suggesting that large investors are withdrawing rather than committing new capital. Retail investors also show a similar pattern, with 48.4% inflow ratios across small and medium-sized investors.

Despite the bearish sentiment in technical indicators, the fund flow score of 7.83 (with a "good" rating) suggests that money is still rotating into the broader sector, potentially indicating longer-term confidence in the energy services market.

Key Technical Signals

The technical outlook for Schlumberger is currently bearish. The overall technical score is 3.67, with 2 bearish indicators and 0 bullish ones, suggesting investors should be cautious.

Recent chart patterns and indicator scores include:

• WR Oversold: Internal diagnostic score of 3.28, suggesting the stock may be bouncing from oversold levels but not strongly enough to confirm a reversal.
• Bearish Engulfing: Internal diagnostic score of 3.47, indicating a strong bearish reversal pattern in recent days.
• MACD Golden Cross: Internal diagnostic score of 4.27, which is a neutral-to-bullish signal but is being overshadowed by the bearish patterns.

Recent indicators by date include multiple appearances of the WR Oversold signal, which may suggest the stock is testing a support level repeatedly without breaking through. Investors should monitor if this resistance is overcome or if a bearish trend continues.

Overall, the technical momentum is weak, with bearish signals dominating and an unclear trend direction.

Conclusion

Schlumberger presents an interesting case of strong fundamentals but weak technical momentum. While the company shows solid profitability and industry positioning, the current technical signals suggest caution for near-term investors.

Actionable takeaway: Given the bearish technical environment and mixed analyst views, consider waiting for a clearer breakout signal or a pull-back before committing to a long-term position in SLB.