Despite fears of weakening U.S. oil prices, the analysts predict North American leverage will outperform next year. The analysts also set higher price targets for Baker Hughes (BHI), Halliburton (HAL), Hercules Offshore (HERO) and Nabors Industries (NBR). The firm's $27 target for Nabors is 60% higher than the stock's current value.
TheStreet Ratings team rates Schlumberger as a "buy" with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate SCHLUMBERGER LTD (SLB) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SLB's revenue growth has slightly outpaced the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 10.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The strong earnings growth this company has enjoyed -- up -- has apparently played a role in driving up its share price by a solid 29.36%. In addition, the rise in the general market has likely contributed to this stock's strong performance during this past year.Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- SCHLUMBERGER LTD has improved earnings per share by 26.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SCHLUMBERGER LTD increased its bottom line by earning $3.95 versus $3.48 in the prior year. This year, the market expects an improvement in earnings ($4.78 versus $3.95).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Energy Equipment & Services industry average. The net income increased by 20.4% when compared to the same quarter one year prior, going from $1,424.00 million to $1,715.00 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market on the basis of return on equity, SCHLUMBERGER LTD has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: SLB Ratings Report