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Schlumberger (SLB) Exceeds Market Returns: Some Facts to Consider

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Schlumberger (SLB - Free Report) closed the most recent trading day at $36.16, moving +1.06% from the previous trading session. The stock's performance was ahead of the S&P 500's daily gain of 0.3%. On the other hand, the Dow registered a loss of 0.48%, and the technology-centric Nasdaq increased by 0.03%.

Shares of the world's largest oilfield services company witnessed a gain of 8.62% over the previous month, beating the performance of the Oils-Energy sector with its gain of 1.33%, and the S&P 500's gain of 2.09%.

The investment community will be paying close attention to the earnings performance of Schlumberger in its upcoming release. On that day, Schlumberger is projected to report earnings of $0.68 per share, which would represent a year-over-year decline of 23.6%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.98 billion, down 1.96% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $2.88 per share and revenue of $35.51 billion. These totals would mark changes of -15.54% and -2.16%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Schlumberger. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. 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, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Currently, Schlumberger is carrying a Zacks Rank of #4 (Sell).

In the context of valuation, Schlumberger is at present trading with a Forward P/E ratio of 12.41. This signifies a discount in comparison to the average Forward P/E of 17.15 for its industry.

One should further note that SLB currently holds a PEG ratio of 9.93. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Oil and Gas - Field Services industry held an average PEG ratio of 2.08.

The Oil and Gas - Field Services industry is part of the Oils-Energy sector. With its current Zacks Industry Rank of 201, this industry ranks in the bottom 19% of all industries, numbering over 250.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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