Zacks Investment Research


It’s a huge earnings season for energy companies. Year-to-date, the Zacks Oils and Energy sector is up a stellar 31%, crushing the S&P 500’s more than 20% decline.

A big name residing in the sector, Schlumberger SLB, is on deck to unveil quarterly earnings on October 21st before the market open.

Schlumberger is a leading oilfield services company providing services to oil and gas explorers and producers worldwide.

Through oilfield services contracts, Schlumberger helps the upstream energy players to locate oil and gas and to drill and evaluate hydrocarbon wells.

Currently, the company sports a favorable Zacks Rank #2 (Buy) with an overall VGM Score of a B.

Let’s dive deeper into how the company stacks up heading into its print.

Share Performance & Valuation

SLB shares have soared in 2022 amid the boom in energy, up more than 50% and coming nowhere near the general market’s performance.

Image Source: Zacks Investment Research

Over the last three months, the story visibly remains the same; SLB shares have tacked on more than 30% in value, crushing the general market’s decline of nearly 6%.

Zacks Investment Research
Image Source: Zacks Investment Research

As we can easily see, the bulls have been out to play in energy stocks in 2022.

SLB shares trade at a 2.3X forward price-to-sales ratio, above the five-year median of 1.8X and representing a steep 164% premium relative to its Zacks Oils and Energy sector.

Zacks Investment Research
Image Source: Zacks Investment Research

Quarterly Estimates

To little surprise, analysts have been bullish, with three positive estimate revisions coming in over the last several months. The Zacks Consensus EPS Estimate of $0.55 reflects a sizable 53% Y/Y uptick in earnings.

Zacks Investment Research
Image Source: Zacks Investment Research

Top-line estimates are also notably strong – the Zacks Consensus Sales Estimate of $7.1 billion suggests Y/Y revenue growth of a double-digit 22%.

Quarterly Performance & Market Reactions

SLB has been on a strong earnings streak as of late, exceeding revenue and earnings estimates in each of its last three quarters.

Just in its latest print, Schlumberger penciled in a sizable 25% EPS beat and an 8% revenue beat. Below is a chart illustrating the company’s revenue on a quarterly basis.

Zacks Investment Research
Image Source: Zacks Investment Research

Further, the market has had mixed reactions in response to the company’s quarterly prints as of late, with shares moving downwards twice and upwards twice following its last four earnings releases.

Putting Everything Together

SLB shares have been notably strong in 2022 amid an energy boom, outperforming the S&P 500 across multiple timeframes.

Shares trade above their five-year median price-to-sales ratio and their Zacks sector.

Analysts have been bullish over the last several months, and estimates indicate strong Y/Y growth in both revenue and earnings.

SLB has been on a hot earnings streak as of late, but the market has had mixed reactions in response to its last four prints.

Heading into the release, Schlumberger SLB sports a Zacks Rank #2 (Buy) with an Earnings ESP Score of 0.2%.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”

Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.8% per year. So be sure to give these hand-picked 7 your immediate attention. See them now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Schlumberger Limited (SLB): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



Image and article originally from www.nasdaq.com. Read the original article here.

By Zacks