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SLB (SLB) Moves 6.6% Higher: Will This Strength Last?

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SLB (SLB - Free Report) shares soared 6.6% in the last trading session to close at $52.42. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8.4% loss over the past four weeks.

SLB’s shares rallied on the last trading day. The bullishness could be attributed to the sustained high oil and gas prices which is encouraging customers to increase drilling activities. Despite a slight pullback from its peak, oil prices remain favorable for exploration and production activities. This has resulted in higher demand for the company’s oilfield services. With the strong demand for its services, SLB is well positioned to generate record-breaking free cash flows this year.

This world's largest oilfield services company is expected to post quarterly earnings of $0.84 per share in its upcoming report, which represents a year-over-year change of +18.3%. Revenues are expected to be $9 billion, up 14.2% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For SLB, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on SLB going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

SLB is part of the Zacks Oil and Gas - Field Services industry. RPC (RES - Free Report) , another stock in the same industry, closed the last trading session 4.2% higher at $7.41. RES has returned -5.5% in the past month.

For RPC, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.12. This represents a change of -70.7% from what the company reported a year ago. RPC currently has a Zacks Rank of #5 (Strong Sell).


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