This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Schlumberger Is So Confident It's Projecting Earnings 3 Years Out

NEW YORK (TheStreet) -- Rising oil prices have taken a meaningful chunk out of household budgets. With many U.S. cities already seeing gas prices spike north of $4 per gallon, things may only get worse, especially with geopolitical issues bringing uncertainty to the oil market.

Despite all of these concerns, Schlumberger (SLB - Get Report) investors aren't worried. This speaks to the level of confidence the company's management has shown with the future of the business.

The stock closed Tuesday at $114.46, up 27% on the year to date, doubling the energy sector's 14% gain. In the trailing 12 months, Schlumberger has rewarded investors with 51% gains, also outperforming the sector's 28% gain during that span.

>>Here Are Three Factors That Could Drag Down Oil Prices Even More

>>All Hail Whiting Petroleum, the New King of the Bakken

With so much money on the table, investors are anxious for a quick resolution to the violence in Iraq. These concerns are valid.

Schlumberger management isn't worried, however. In fact, since the conflict began the stock has been up by almost 15%. The reason? Management has communicated a clear and comprehensive multi-year growth plan towards 2017.

The main drivers of growth will come from the company's drilling and production technology. Management has spoken favorably about integration capabilities and what it calls "best-in-class operations and technology." The company intends to drive a wedge between itself and its peers like Halliburton (HAL), Baker Hughes (BHI).

The entire industry has been under significant pricing pressure due to, among other things, weak oil prices, cost inflation and slumping production levels. Schlumberger wants to use its growing free cash flow to make the sort of efficiency improvements needed to outgrow the market and widen the gap lead.

To that end, by 2017 Schlumberger is targeting earnings between $9 and $10 per share, which would result in a compound annual growth rate of roughly 17% to 20%. Analysts haven't yet modeled for that far ahead. Current estimates for full-year 2014 is for $5.70 a share and the company earned $4.75 in 2013.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
SLB $68.81 0.00%
AAPL $94.02 0.00%
FB $104.07 0.00%
GOOG $683.57 0.00%
TSLA $162.60 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs