A History of Outperforming Analyst Forecasts and Beating the Odds: Schlumberger Limited (SLB)

Schlumberger Limited (NYSE: SLB) stock fell -2.60% on Monday to $55.86 against a previous-day closing price of $57.35. With 15.08 million shares changed hands, the volume of the stock remained heavier than its average volume of 12.62 million shares. During the session, the Oil & Gas Equipment & Services company that operates in wider Energy sector, reached to the highest price of $57.70 whereas the lowest price it dropped to was $55.23. The 52-week range on SLB shows that it touched its highest point at $59.45 and its lowest point at $30.65 during that stretch. It currently has a 1-year price target of $61.03. With its current market cap of 79.25 billion, SLB has annualized dividend of $0.70 while the current yield stands at 1.25%. Beta for the stock currently stands at 1.81.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SLB was down-trending over the past week, with a drop of -4.15%, but this was up by 7.92% over a month. Three-month performance surged to 22.26% while six-month performance rose 59.28%. The stock gained 50.77% in the past year, while it has gained 4.49% so far this year. A look at the trailing 12-month EPS for SLB yields 2.07 with Next year EPS estimates of 3.69. For the next quarter, that number is 0.62. This implies an EPS growth rate of 117.40% for this year and 22.85% for next year. EPS is expected to grow by 44.40% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 25.10%.

Float and Shares Shorts:

At present, 1.42 billion SLB shares are outstanding with a float of 1.42 billion shares on hand for trading. On Oct 13, 2022, short shares totaled 31.65 million, which was 2.23% higher than short shares on Sep 14, 2022. In addition to Mr. Olivier Le Peuch as the firm’s CEO & Director, Mr. Stephane Biguet serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 82.93% of SLB’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 48.07% of SLB, in contrast to 36.99% held by mutual funds. Shares owned by individuals account for 2.86%. As the largest shareholder in SLB with 8.30% of the stake, The Vanguard Group, Inc. holds 117,743,022 shares worth 117,743,022. A second-largest stockholder of SLB, SSgA Funds Management, Inc., holds 91,245,791 shares, controlling over 6.44% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in SLB, holding 69,932,034 shares or 4.93% stake. With a 3.04% stake in SLB, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 43,121,202 shares are owned by the mutual fund manager. The SPDR Series – Energy Select Secto, which owns about 2.55% of SLB stock, is the second-largest Mutual Fund holder. It holds 36,174,351 shares valued at 1.93 billion. Vanguard 500 Index Fund holds 2.31% of the stake in SLB, owning 32,777,369 shares worth 1.75 billion.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SLB since 31 analysts follow the stock currently. There are 24 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 4 believe that the stock is worth HOLDING, 3 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With SLB analysts setting a high price target of $72.00 and a low target of $47.00, the average target price over the next 12 months is $63.07. Based on these targets, SLB could surge 28.89% to reach the target high and fall by -15.86% to reach the target low. Reaching the average price target will result in a growth of 12.91% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. SLB will report FY 2023 earnings on 01/19/2024. Analysts have provided yearly estimates in a range of $3.38 being high and $2.84 being low. For SLB, this leads to a yearly average estimate of $3.03. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Schlumberger Limited surprised analysts by $0.03 when it reported $0.71 EPS against a consensus estimate of $0.68. The surprise factor in the prior quarter was $0.08. Based on analyst estimates, the high estimate for the next quarter is $0.73 and the low estimate is $0.55. The average estimate for the next quarter is thus $0.61.

Summary of Insider Activity:

Insiders traded SLB stock several times over the past three months with 2 Buys and 9 Sells. In these transactions, 50,089 shares were bought while 151,306 shares were sold. The number of buy transactions has increased to 33 while that of sell transactions has risen to 35 over the past year. The total number of shares bought during that period was 321,779 while 379,363 shares were sold.

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