SLB (SLB) is upgraded to Outperform from In-Line with a $54 price target, raised from $38, while Halliburton (HAL) is downgraded to In-Line from Outperform with a $35 PT, up from $28, at Evercore ISI, but both oilfield services stocks fell back Tuesday after posting big gains in the previous session.
The outlook at SLB (SLB) is clearer than it has been in more than two years, Evercore analysts led by Stephen Richardson said, as the closing of the ChampionX acquisition and reduction of exposure to APS through the Palliser exit has repositioned the company towards the wellhead and production and reduced the overall risk profile of the enterprise.
Evercore believes international spending, particularly the Middle East, will outpace North American oilfield spending in 2026, which should flatter SLB’s (SLB) business mix with stronger positioning in the Middle East and other key international markets and perhaps more significantly a more limited footprint in the U.S. land market.
Richardson and his team raised its 2026 and 2027 EPS estimates for SLB (SLB) to $3.00 and $3.40 from $2.97 and $3.30, respectively, as higher international activity should benefit the company’s Reservoir Performance and Well Construction segments.
Halliburton’s (HAL) North American exposure remains a key overhang, Evercore said, as the company remains meaningfully more exposed to U.S. activity than large-cap oilfield services peers, with ~40% of revenue tied to North American markets compared to ~20% for SLB (SLB) and 26% for Baker Hughes (BKR), which benefit from a greater international and offshore mix.
Evercore’s view on 2026 North American spending suggests a further decline, with U.S. activity slowing amid ongoing consolidation, continued capital efficiency gains, and plateauing onshore productivity; against this backdrop, Richardson and his team continue to view domestic pressure pumping as a headwind for Halliburton (HAL) despite ongoing fleet rationalization and cost actions.