Schlumberger Limited (SLB) | Investment Case

1. Company Snapshot

1.a. Company Description

Schlumberger Limited provides technology for the energy industry worldwide.The company operates through four divisions: Digital & Integration, Reservoir Performance, Well Construction, and Production Systems.It offers software, information management, and IT infrastructure services; consulting services for reservoir characterization, field development planning, and production enhancement; petro technical data services and training solutions; reservoir interpretation and data processing services; asset performance solutions; open and cased-hole services; exploration and production pressure and flow-rate measurement services; pressure pumping, well stimulation, and coiled tubing equipment for downhole mechanical well intervention, reservoir monitoring, and downhole data acquisition; and integrated production systems.

The company also provides mud logging and engineering support services; drilling equipment and services for shipyards, drilling contractors, energy companies, and rental tool companies; land drilling rigs and related services; drilling tools; well cementing products and services; and well planning and drilling, engineering, supervision, logistics, procurement, contracting, and drilling rig management services, as well as supplies engineered drilling fluid systems; and designs, manufactures, and markets roller cone and fixed cutter drill bits.In addition, it offers well completion services and equipment; artificial lift production equipment and optimization services; valves; process systems; and integrated subsea production systems comprising wellheads, subsea trees, manifolds and flowline connectors, control systems, connectors, and services, as well as designs and manufactures onshore and offshore platform wellhead systems and processing solutions.The company was formerly known as Socie´te´ de Prospection E´lectrique.

Schlumberger Limited was founded in 1926 and is based in Houston, Texas.

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1.b. Last Insights on SLB

Schlumberger's recent momentum is driven by its diversified portfolio, robust financials, and expanding growth avenues in digital and data center infrastructure. The company's Q4 earnings release highlighted a stronger finish to 2025, with improving international activity trends. According to CEO Olivier Le Peuch, struggles in key regions are behind the company, and it plans to return over $4 billion to shareholders in 2026, bolstering investor confidence.

1.c. Company Highlights

Last Price	50.85
Change Percentage	-1.34%
Open	51.43
Previous Close	51.54
Market Cap ( Millions)	76038
Volume	12710867
Year High	52.4
Year Low	31.11
M A 50	45.07
M A 200	37.48

FCF Yield	6.31%
Dividend Yield	2.26%
ROE	14.64%
Debt / Equity	44.57%
Net Debt / EBIDTA	120.33%
Price To Book	2.86
Price Earnings Ratio	22.33
Price To FCF	15.86
Price To sales	2.13
EV / EBITDA	11.84

2. SLB N.V. Delivers Strong 2025 Financial Performance, Sets Stage for Continued Growth

SLB N.V. ended 2025 with a strong financial performance, achieving a 9% sequential revenue growth, with fourth-quarter revenue reaching $9.7 billion. The company's adjusted earnings per share (EPS) came in at $0.78, beating analyst estimates of $0.742. The production systems and digital divisions led the way, with digital annual recurring revenue surpassing $1 billion, reflecting year-on-year growth of 15%. The company's adjusted EBITDA margin is expected to remain relatively consistent with 2025 levels in 2026.

Publication Date: Jan -25

                                    📋 Highlights
                                    Strong Q4 Revenue Growth::
                                                SLB N.V. achieved $9.7 billion in fourth-quarter revenue, a 9% sequential increase, with 7% organic growth internationally and 6% in North America.
Robust Cash Flow Generation::
                                                The company generated $3 billion in operating cash flow and $2.3 billion in free cash flow, reducing net debt by $1.8 billion to $7.4 billion by year-end.
Digital Division Growth::
                                                Digital annual recurring revenue surpassed $1 billion, reflecting 15% year-on-year growth, driven by over 50 customers adopting Lumi and Tela.
2026 Shareholder Returns::
                                                SLB plans to return over $4 billion to shareholders in 2026, including a 3.5% dividend increase and $2.4 billion in stock buybacks.
Capital Investment Focus::
                                                $2.5 billion in 2026 capital spending supports growth in digital, data centers, and production recovery, maintaining a CapEx-to-sales ratio of 5–7%.

                                

Revenue Growth Drivers

The company's international markets are expected to drive growth in 2026, with a rebound in Saudi Arabia, momentum in Kuwait and the UAE, and growth in India, Libya, Algeria, Egypt, and Iraq. The digital business is seeing significant growth, with over 50 customers adopting Lumi and more than a dozen customers engaging with Tela. As noted by SLB's CEO, Olivier Le Peuch, the company has a unique portfolio that contributes to production recovery, with a focus on technology and integrated capabilities.

Cash Flow Generation and Shareholder Returns

In the fourth quarter, SLB N.V. generated $3 billion of cash flow from operations and $2.3 billion of free cash flow, with net debt reduced by $1.8 billion during the quarter to end the year at $7.4 billion. The company will return more than $4 billion to shareholders in 2026 through a combination of an increased dividend and share repurchase, with a 3.5% dividend increase announced.

Valuation and Growth Prospects

SLB N.V.'s current valuation metrics, including a P/E Ratio of 21.58 and EV/EBITDA of 11.31, suggest that the market is pricing in moderate growth expectations. With analysts estimating next year's revenue growth at 4.4%, the company's focus on digital and data center solutions, as well as its presence in key markets, positions it for long-term growth. The company's ROIC of 9.11% and ROE of 13.1% indicate a relatively healthy profitability profile.

Future Outlook

The company's exit rate for 2026 is expected to be higher than 2025, driven by international markets. With a strong track record of operating in Venezuela and a significant set of assets ready to be deployed, SLB N.V. is well-positioned to benefit from a revitalization of the oil industry in the country. The data center infrastructure business is expected to reach a $1 billion run rate in revenue by year-end, with plans to expand internationally and add new customers.

3. NewsRoom

SLB Limited $SLB Shares Acquired by BNP PARIBAS ASSET MANAGEMENT Holding S.A.

Feb -20

Source: defenseworld.net

Alberta Investment Management Corp Acquires Shares of 97,000 SLB Limited $SLB

Feb -20

Source: defenseworld.net

SLB Limited $SLB Shares Purchased by Assetmark Inc.

Feb -19

Source: defenseworld.net

Colrain Capital LLC Has $5.53 Million Stock Holdings in SLB Limited $SLB

Feb -17

Source: defenseworld.net

Aberdeen Group plc Has $55.26 Million Holdings in SLB Limited $SLB

Feb -16

Source: defenseworld.net

SLB Awarded Multiple Offshore Drilling Contracts by Mubadala Energy for Tangkulo Deepwater Development in Indonesia

Feb -12

Source: businesswire.com

Eubel Brady & Suttman Asset Management Inc. Has $22.79 Million Position in SLB Limited $SLB

Feb -12

Source: defenseworld.net

SLB Limited $SLB is MQS Management LLC’s 3rd Largest Position

Feb -11

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.45%)

6. Segments

Well Construction

Expected Growth: 6.4%

- The drilling and completion systems segment is driven by increasing demand for integrated well construction services, growing need for project management to optimize well placement, and reduce operational risks, along with the rising adoption of digital solutions to enhance hydrocarbon recovery.

Production Systems

Expected Growth: 7.4%

- This segment is poised for growth driven by increasing demand for integrated production and production optimization services, particularly in the well surveillance and artificial lift segments, as operators seek to maximize hydrocarbon recovery while reducing operating costs.

Reservoir Performance

Expected Growth: 6.6%

- This segment is poised for growth, fueled by increasing demand for enhanced oil recovery (EOR) and improved hydrocarbon recovery, as well as the need for operators to optimize reservoir performance and increase production from existing fields.

Digital & Integration

Expected Growth: 12.3%

- The Digital & Integration segment is expected to grow, driven by increasing customer demand for digital solutions to optimize workflows, improve operational efficiency, and reduce costs, amidst the ongoing digital transformation in the oil and gas industry.

Eliminations & Other

Expected Growth: 7.4%

- This segment, encompassing divestitures, minority investments, and non-core businesses, is poised for moderate expansion, driven primarily by the company’s strategic focus on streamlining its portfolio and allocating resources to core oilfield services operations.

7. Detailed Products

Drilling

Schlumberger's drilling segment provides drilling systems and equipment, including drill bits, drilling fluids, and drilling services to help customers optimize their drilling operations.

Reservoir Characterization

Schlumberger's reservoir characterization segment provides services and software to help customers understand and model their reservoirs, including seismic processing and interpretation, and reservoir simulation.

Production

Schlumberger's production segment provides services and equipment to help customers optimize their production operations, including artificial lift, well intervention, and production optimization.

Cameron

Schlumberger's Cameron segment provides surface and subsea equipment and services, including valves, pumps, and compressors, to help customers optimize their production operations.

OneSubsea

Schlumberger's OneSubsea segment provides integrated production systems and services for subsea oil and gas production, including subsea trees, manifolds, and control systems.

SIS

Schlumberger's SIS (Software Integrated Solutions) segment provides software and services to help customers optimize their operations, including exploration, production, and reservoir management.

8. Schlumberger Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

Schlumberger Limited faces moderate threat from substitutes, as there are limited alternatives to its specialized oilfield services. However, the company's strong brand reputation and technological advancements help mitigate this threat.

Bargaining Power Of Customers

Schlumberger Limited's customers, primarily oil and gas companies, have significant bargaining power due to their large scale of operations and ability to negotiate prices. This forces the company to maintain competitive pricing and high-quality services.

Bargaining Power Of Suppliers

Schlumberger Limited has a diverse supplier base, which reduces the bargaining power of individual suppliers. The company's strong relationships with suppliers and its ability to negotiate prices also mitigate this threat.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the oilfield services industry, including significant capital requirements, technological expertise, and regulatory hurdles.

Intensity Of Rivalry

The oilfield services industry is highly competitive, with several established players competing for market share. Schlumberger Limited must continuously innovate and improve its services to maintain its market position.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	37.21%
Debt Cost	5.19%
Equity Weight	62.79%
Equity Cost	12.14%
WACC	9.55%
Leverage	59.26%

11. Quality Control: Schlumberger Limited passed 3 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

ExxonMobil

A-Score: 6.7/10

Value: 5.6

Growth: 5.0

Quality: 5.9

Yield: 8.0

Momentum: 6.0

Volatility: 9.7

1-Year Total Return ->

Chevron

A-Score: 6.4/10

Value: 5.7

Growth: 4.9

Quality: 5.0

Yield: 8.0

Momentum: 5.0

Volatility: 9.7

1-Year Total Return ->

Devon Energy

A-Score: 6.4/10

Value: 7.7

Growth: 5.2

Quality: 6.2

Yield: 8.0

Momentum: 5.0

Volatility: 6.0

1-Year Total Return ->

Baker Hughes

A-Score: 5.7/10

Value: 5.1

Growth: 4.2

Quality: 6.1

Yield: 4.0

Momentum: 8.0

Volatility: 7.0

1-Year Total Return ->

Schlumberger

A-Score: 5.3/10

Value: 5.6

Growth: 4.9

Quality: 6.0

Yield: 5.0

Momentum: 3.5

Volatility: 6.7

1-Year Total Return ->

Halliburton

A-Score: 5.0/10

Value: 5.5

Growth: 5.2

Quality: 4.8

Yield: 5.0

Momentum: 3.5

Volatility: 5.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

4.81%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.55%

Schlumberger Limited - AN8068571086

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on SLB

1.c. Company Highlights

Fairly Valued

Medium Volatility

Average Growth

Earnings Beats

Expensive

Weak Momentum

Stable Momentum

Lower Growth

Revenues Miss

Revenues Beats

Average Quality

Earnings Miss

Average Yield

2. SLB N.V. Delivers Strong 2025 Financial Performance, Sets Stage for Continued Growth

Revenue Growth Drivers

Cash Flow Generation and Shareholder Returns

Valuation and Growth Prospects

Future Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.45%)

6. Segments

Well Construction

Expected Growth: 6.4%

Production Systems

Expected Growth: 7.4%

Reservoir Performance

Expected Growth: 6.6%

Digital & Integration

Expected Growth: 12.3%

Eliminations & Other

Expected Growth: 7.4%

7. Detailed Products

Drilling

Reservoir Characterization

Production

Cameron

OneSubsea

SIS

8. Schlumberger Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Schlumberger Limited passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

50.85$

Current Price

50.85$

Potential

12.e Scoring ^Insights

12.f DCF ^BETA