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Schlumberger (SLB) Stock Drops Despite Market Gains: Important Facts to Note

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Schlumberger (SLB - Free Report) closed the most recent trading day at $33.73, moving -5.89% from the previous trading session. The stock's performance was behind the S&P 500's daily gain of 0.96%. On the other hand, the Dow registered a gain of 0.89%, and the technology-centric Nasdaq increased by 0.94%.

Prior to today's trading, shares of the world's largest oilfield services company had gained 6.48% lagged the Oils-Energy sector's gain of 6.67% and outpaced the S&P 500's gain of 0.5%.

Market participants will be closely following the financial results of Schlumberger in its upcoming release. In that report, analysts expect Schlumberger to post earnings of $0.77 per share. This would mark a year-over-year decline of 9.41%. Meanwhile, our latest consensus estimate is calling for revenue of $8.49 billion, down 7.08% from the prior-year quarter.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $3.15 per share and a revenue of $35.98 billion, signifying shifts of -7.62% and -0.84%, respectively, from the last year.

Investors should also note any recent changes to analyst estimates for Schlumberger. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 1.16% downward. Currently, Schlumberger is carrying a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Schlumberger has a Forward P/E ratio of 11.38 right now. This indicates a discount in contrast to its industry's Forward P/E of 15.36.

It's also important to note that SLB currently trades at a PEG ratio of 9.1. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Oil and Gas - Field Services industry was having an average PEG ratio of 3.65.

The Oil and Gas - Field Services industry is part of the Oils-Energy sector. At present, this industry carries a Zacks Industry Rank of 141, placing it within the bottom 43% of over 250 industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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