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Schlumberger (SLB) Stock Jumps 39.3% YTD: More Room to Run?
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Shares of Schlumberger Limited (SLB - Free Report) have jumped 39.3% year to date (YTD) compared with the industry’s 15.4% growth. The Zacks Rank #3 (Hold) stock is likely to see year-over-year earnings growth of 52.3% and 36.9%, respectively.
Image Source: Zacks Investment Research
Let’s delve into the factors behind the stock’s price appreciation.
What’s Favoring the Stock?
The price of West Texas Intermediate crude, which is trading above $100 per barrel, has improved drastically in the past year. The commodity price shot up, primarily due to the escalation of Russian attacks on Ukraine.
High oil price is beneficial for exploration and production activities, which will lead to increased demand for oilfield services since oilfield service players help drillers efficiently set up oil and gas wells. Schlumberger, a leading oilfield service player, is thus well-positioned to capitalize on the mounting demand.
Schlumberger expects handsome growth in international and North American markets. The company believes that oil demand will exceed the pre-pandemic mark before 2022-end and will continue to strengthen next year.
It seems the outlook for Schlumberger’s oilfield services is bright and there is plenty of room for further price appreciation.
Although there is room for further price appreciations, one of the factors partially hindering the stock price rally is Schlumberger’s exposure to more debt capital as compared to composite stocks belonging to the industry.
Stocks to Consider
Some better-ranked players in the energy space are Devon Energy Corporation (DVN - Free Report) , Viper Energy Partners LP (VNOM - Free Report) and Centennial Resource Development, Inc. . While Devon Energy and Viper Energy Partners sport a Zacks Rank #1 (Strong Buy), Centennial Resource carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the United States, Devon Energy is a leading upstream player with a strong footprint in the prolific Delaware Basin. Devon Energy is also focused on returning capital to shareholders.
In the past seven days, Devon Energy has witnessed upward earnings estimate revisions for 2022.
In the prolific Permian and Eagle Ford shale play, Viper Energy has a net of 27,027 royalty acres. Operations in those undeveloped assets require zero capital requirement. This secures sustainable free cashflow for Viper Energy.
In the past seven days, Viper Energy has witnessed upward earnings estimate revisions for 2022.
In the Permian – the most prolific basin in the United States – Centennial Resource has a strong footprint. Centennial Resource has announced a $350-million share buyback program, reflecting its focus on returning capital to stockholders.
In the past 30 days, Centennial Resource has witnessed upward earnings estimate revisions for 2022.
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Schlumberger (SLB) Stock Jumps 39.3% YTD: More Room to Run?
Shares of Schlumberger Limited (SLB - Free Report) have jumped 39.3% year to date (YTD) compared with the industry’s 15.4% growth. The Zacks Rank #3 (Hold) stock is likely to see year-over-year earnings growth of 52.3% and 36.9%, respectively.
Image Source: Zacks Investment Research
Let’s delve into the factors behind the stock’s price appreciation.
What’s Favoring the Stock?
The price of West Texas Intermediate crude, which is trading above $100 per barrel, has improved drastically in the past year. The commodity price shot up, primarily due to the escalation of Russian attacks on Ukraine.
High oil price is beneficial for exploration and production activities, which will lead to increased demand for oilfield services since oilfield service players help drillers efficiently set up oil and gas wells. Schlumberger, a leading oilfield service player, is thus well-positioned to capitalize on the mounting demand.
Schlumberger expects handsome growth in international and North American markets. The company believes that oil demand will exceed the pre-pandemic mark before 2022-end and will continue to strengthen next year.
It seems the outlook for Schlumberger’s oilfield services is bright and there is plenty of room for further price appreciation.
Although there is room for further price appreciations, one of the factors partially hindering the stock price rally is Schlumberger’s exposure to more debt capital as compared to composite stocks belonging to the industry.
Stocks to Consider
Some better-ranked players in the energy space are Devon Energy Corporation (DVN - Free Report) , Viper Energy Partners LP (VNOM - Free Report) and Centennial Resource Development, Inc. . While Devon Energy and Viper Energy Partners sport a Zacks Rank #1 (Strong Buy), Centennial Resource carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the United States, Devon Energy is a leading upstream player with a strong footprint in the prolific Delaware Basin. Devon Energy is also focused on returning capital to shareholders.
In the past seven days, Devon Energy has witnessed upward earnings estimate revisions for 2022.
In the prolific Permian and Eagle Ford shale play, Viper Energy has a net of 27,027 royalty acres. Operations in those undeveloped assets require zero capital requirement. This secures sustainable free cashflow for Viper Energy.
In the past seven days, Viper Energy has witnessed upward earnings estimate revisions for 2022.
In the Permian – the most prolific basin in the United States – Centennial Resource has a strong footprint. Centennial Resource has announced a $350-million share buyback program, reflecting its focus on returning capital to stockholders.
In the past 30 days, Centennial Resource has witnessed upward earnings estimate revisions for 2022.