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Schlumberger Limited (SLB) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Schlumberger (SLB - Free Report) ? Shares have been on the move with the stock up 44% over the past month. The stock hit a new 52-week high of $50.54 in the previous session. Schlumberger has gained 68.3% since the start of the year compared to the 36.8% move for the Zacks Oils-Energy sector and the 6.6% return for the Zacks Oil and Gas - Field Services industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 21, 2022, Schlumberger reported EPS of $0.63 versus consensus estimate of $0.55.
For the current fiscal year, Schlumberger is expected to post earnings of $2.03 per share on $27.36 billion in revenues. This represents a 58.59% change in EPS on a 19.32% change in revenues. For the next fiscal year, the company is expected to earn $2.83 per share on $31.52 billion in revenues. This represents a year-over-year change of 39.41% and 15.19%, respectively.
Valuation Metrics
Schlumberger may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Schlumberger has a Value Score of C. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 24.8X current fiscal year EPS estimates, which is a premium to the peer industry average of 24.2X. On a trailing cash flow basis, the stock currently trades at 17.9X versus its peer group's average of 15.5X. Additionally, the stock has a PEG ratio of 0.58. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Schlumberger currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Schlumberger fits the bill. Thus, it seems as though Schlumberger shares could still be poised for more gains ahead.
How Does SLB Stack Up to the Competition?
Shares of SLB have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Liberty Energy Inc. (LBRT - Free Report) . LBRT has a Zacks Rank of # 1 (Strong Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. Liberty Energy Inc. beat our consensus estimate by 23.81%, and for the current fiscal year, LBRT is expected to post earnings of $2.87 per share on revenue of $3.84 billion.
Shares of Liberty Energy Inc. have gained 36.9% over the past month, and currently trade at a forward P/E of 8.65X and a P/CF of 33.71X.
The Oil and Gas - Field Services industry is in the top 7% of all the industries we have in our universe, so it looks like there are some nice tailwinds for SLB and LBRT, even beyond their own solid fundamental situation.
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Schlumberger Limited (SLB) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Schlumberger (SLB - Free Report) ? Shares have been on the move with the stock up 44% over the past month. The stock hit a new 52-week high of $50.54 in the previous session. Schlumberger has gained 68.3% since the start of the year compared to the 36.8% move for the Zacks Oils-Energy sector and the 6.6% return for the Zacks Oil and Gas - Field Services industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 21, 2022, Schlumberger reported EPS of $0.63 versus consensus estimate of $0.55.
For the current fiscal year, Schlumberger is expected to post earnings of $2.03 per share on $27.36 billion in revenues. This represents a 58.59% change in EPS on a 19.32% change in revenues. For the next fiscal year, the company is expected to earn $2.83 per share on $31.52 billion in revenues. This represents a year-over-year change of 39.41% and 15.19%, respectively.
Valuation Metrics
Schlumberger may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Schlumberger has a Value Score of C. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 24.8X current fiscal year EPS estimates, which is a premium to the peer industry average of 24.2X. On a trailing cash flow basis, the stock currently trades at 17.9X versus its peer group's average of 15.5X. Additionally, the stock has a PEG ratio of 0.58. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Schlumberger currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Schlumberger fits the bill. Thus, it seems as though Schlumberger shares could still be poised for more gains ahead.
How Does SLB Stack Up to the Competition?
Shares of SLB have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Liberty Energy Inc. (LBRT - Free Report) . LBRT has a Zacks Rank of # 1 (Strong Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. Liberty Energy Inc. beat our consensus estimate by 23.81%, and for the current fiscal year, LBRT is expected to post earnings of $2.87 per share on revenue of $3.84 billion.
Shares of Liberty Energy Inc. have gained 36.9% over the past month, and currently trade at a forward P/E of 8.65X and a P/CF of 33.71X.
The Oil and Gas - Field Services industry is in the top 7% of all the industries we have in our universe, so it looks like there are some nice tailwinds for SLB and LBRT, even beyond their own solid fundamental situation.