Stock Analysis | Schlumberger Outlook - Technical Weakness and Mixed Analyst Sentiment

Schlumberger Outlook - Technical Weakness and Mixed Analyst Sentiment

Market Snapshot: Schlumberger (SLB) is currently facing technical headwinds with bearish indicators dominating and a weak overall trend, while recent analyst ratings show optimism that contrasts with the price trajectory.

News Highlights

Recent news across the energy and technology sectors includes developments in U.S. vaccine policies and the fast-tracking of geothermal and uranium projects, which could indirectly impact Schlumberger’s long-term performance. Notable updates include:

• U.S. Geothermal Expansion: The Trump administration is fast-tracking geothermal energy projects, signaling a potential boost for energy infrastructure. This could benefit Schlumberger’s operations in the geothermal and energy transition space.
• China's Manufacturing Activity: While China’s factory activity slightly improved in May, growth remains subdued, which could affect global energy demand and, by extension, Schlumberger’s business in Asia.
• Energy Costs and Policy Moves: New Jersey introduces legislation aimed at addressing energy costs, and utility rate hikes are on the horizon. These developments may influence energy pricing models that Schlumberger operates within.

Analyst Views & Fundamentals

Average Rating Score (Simple Mean): 5.00

Weighted Rating Score (Performance-Weighted): 4.44

Rating Consistency: Analysts are not aligned, with a clear divergence in expectations, but both Melius Research and UBS have issued "Strong Buy" ratings in the last 20 days.

The current price has risen by 0.59%, and this upward move is in line with the weighted expectations. However, the dispersion among analysts suggests caution in interpreting these bullish signals.

Fundamental Highlights:

• Net Income to Revenue: 33.06% (score: 3.00 internal diagnostic score)
• Net Profit Margin (NPM): 12.26% (score: 2.87 internal diagnostic score)
• Basic Earnings Per Share (YoY Growth): -13.07% (score: 5.15 internal diagnostic score)
• Total Profit (YoY Growth): -15.48% (score: 4.63 internal diagnostic score)
• Return on Assets (ROA): 2.15% (score: 3.15 internal diagnostic score)
• Price-to-Earnings (PE) Ratio: 44.87 (score: 0.60 internal diagnostic score)
• Operating Cycle: 147.07 days (score: 3.00 internal diagnostic score)
• Cash to Market Value (Cash-MV): 36.15% (score: 1.79 internal diagnostic score)

While some fundamentals like net income and operating cycle show strength, the company's earnings and profit growth are deteriorating. The PE ratio is particularly concerning, as it is low and reflects poor valuation.

Money-Flow Trends

Big-money investors are showing a mixed but overall negative sentiment toward Schlumberger, with inflow ratios across all categories—small, medium, large, and extra-large—hovering around 48-49% and a fund flow score of 7.83 (internal diagnostic score), classified as “good.” This suggests that while there’s not a surge in buying activity, the stock is not experiencing mass selling pressure.

Retail investors (small trend) are also showing a negative trend. Overall, institutional and retail flows are aligned in their bearish bias, but the inflow ratios suggest that the selling pressure is not extreme, possibly indicating a period of consolidation rather than panic selling.

Key Technical Signals

Schlumberger's technical indicators are currently bearish, with three negative signals outweighing zero bullish ones. The technical score is 3.86 (internal diagnostic score), and the trend is described as "weak," suggesting investors should proceed with caution.

Key indicators and scores (internal diagnostic scores 0-10):

• WR Overbought: 1.51 — signals overbought conditions with weak historical returns.
• RSI Overbought: 1.32 — confirms overbought territory, with a historically bearish bias.
• Marubozu White: 3.27 — a strong bearish candlestick pattern indicating weak momentum.
• Ex-Dividend Date: 6.5 — a neutral event with mixed historical performance.
• Dividend Record Date: 6.5 — similar to the Ex-Dividend event, with no clear bias.
• Bullish Engulfing: 4.05 — a mixed signal with a 50% win rate historically.

Recent Chart Patterns: Over the last five trading days, Schlumberger has seen multiple overbought signals and bearish candle patterns (Marubozu White). The most recent day (2025-09-03) featured both the Ex-Dividend and Dividend Record dates, which typically have a neutral impact.

Technical Insights: The technical side is weak, and it's suggested to avoid the stock. Momentum is unclear, and bearish signals are dominant.

Conclusion

While Schlumberger has attracted some recent analyst optimism with "Strong Buy" ratings, the technical picture is bearish, and fundamental growth indicators are deteriorating. The company’s fundamentals remain mixed, with strong net income and operating cycle metrics, but weak earnings and profit growth. Given the low technical score and bearish indicators, we recommend considering waiting for a pull-back before entering. Investors should closely watch for any shift in technical patterns and earnings momentum before committing capital.