20.5% Potential Return With Schlumberger
Contributor since 2022 / 391 Followers
Summary:
- Schlumberger is undervalued based on historical P/E ratios and forecasted EPS, with potential for a 20.5% annualized return including covered call premium and dividend.
- SLB’s Digital & Integration division shows significant improvements, achieving new revenue highs and driving efficiencies, contributing to a 50 basis point EBITDA improvement.
- Risks include volatile oil prices, potential oversupply, weak demand in China, customer capex reductions, and foreign currency exchange rate fluctuations.
- Selling covered calls on SLB can mitigate risks, offering potential profits even if the stock price remains stagnant, with analysts predicting up to a 57% upside.
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SLB Overview
Schlumberger (NYSE:SLB) is the largest oilfield services company that provides technology for reservoir characterization, drilling, production, and processing to the oil and gas industry. It operates through four divisions: Digital & Integration, Reservoir Performance, Well Construction, and Production Systems. Over three-fourths of its revenue base is tied to
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