Schlumberger (SLB): A Falling Stock with Analyst-Backed Upside Potential

Schlumberger Limited (SLB) has faced recent headwinds, with its stock price hovering near $35—a significant drop from its 52-week high of $50.94. Yet, analysts remain bullish, labeling it a top pick among “falling stocks” to buy. Is this optimism justified? Let’s dissect the data.

Analysts’ Bullish Consensus: A “Strong Buy” with 38% Upside

Analysts maintain a Strong Buy consensus on SLB, driven by long-term growth potential in energy services and digital innovation. As of May 2025, 11 out of 13 analysts rated SLB a “Buy,” with no “Sell” recommendations. The average 12-month price target stands at $48.05, implying a 38.21% upside from its May 2 closing price of $34.73.

The highest target of $63.00 (from Bernstein) reflects optimism about SLB’s strategic moves, such as its acquisition of ChampionX and expansion into digital oilfield solutions. Even the most cautious analyst sets a $38.00 price target, suggesting a floor below current levels.

Financials: Near-Term Slump, Long-Term Growth

While SLB’s Q1 2025 results showed a 3% year-over-year revenue decline to $8.49 billion, its North American division grew revenue by 8% due to strong demand for data center infrastructure. Analysts note that Schlumberger’s adjusted EBITDA margins improved despite the dip, signaling cost discipline.

Looking ahead, analysts project a rebound in 2026, with EPS growth of 7.73% and revenue growth of 5.09%, driven by:
- Digital initiatives: The Digital & Integration division grew revenue by 6% in Q1.
- Strategic acquisitions: The pending ChampionX deal aims to strengthen SLB’s production optimization capabilities.
- Dividend resilience: Schlumberger maintains a $0.285 quarterly dividend (3.28% yield), signaling confidence in cash flow.

Risks to Consider

The case for SLB isn’t without challenges:
1. Oil prices: Crude below $70/barrel could deter oil producers from spending on services.
2. Trade policies: U.S. tariffs on imports may increase costs for SLB’s global operations.
3. Earnings volatility: Schlumberger missed its Q1 EPS estimate by 1.22%, raising concerns about execution risks.

Why Analysts Still Recommend Buying the Dip

Despite these risks, analysts highlight three key strengths:
1. Valuation: At a P/E of 11.17, SLB trades at a discount to its historical average, offering a margin of safety.
2. Institutional support: 81.99% of shares are held by institutions, with firms like Forum Financial Management increasing stakes.
3. Cyclical recovery: Energy services often rebound when oil prices stabilize. Analysts estimate a $63.00 price target assumes oil stabilizes near $75/barrel.

Conclusion: A Buy for Long-Term Investors

Schlumberger’s Strong Buy consensus, dividend yield, and strategic investments in digital solutions make it a compelling pick despite near-term challenges. While risks like oil price fluctuations and trade tensions linger, the average $48.05 price target suggests analysts believe SLB can recover—and thrive—by 2026.

For investors with a 12–18 month horizon, SLB’s combination of a discounted valuation, dividend stability, and growth catalysts positions it as one of the best falling stocks to buy. The data supports this: Schlumberger has beaten EPS estimates 75% of the time over the past year, outperforming its industry’s 33% beat rate.

In short, SLB’s current dip may present a rare opportunity to buy a leader in energy innovation at a bargain price.