On Friday, SLB (NYSE: SLB) received reaffirmation on its stock rating and price target from a major financial services firm. Citi has maintained a "Buy" rating on the oilfield services company, with a steady price target of $62.00. The endorsement follows SLB's second-quarter earnings report, which showcased a slight outperformance compared to expectations.
SLB reported earnings before interest, taxes, depreciation, and amortization (EBITDA) of $2.288 billion for the second quarter, surpassing the FactSet consensus by 1% and Citi's forecast by 2%. The company's adjusted earnings per share (EPS) came in at 85 cents, beating the consensus of 83 cents and Citi's estimate of 82 cents. The favorable EPS was partly attributed to a lower-than-anticipated tax rate.
The company demonstrated robust international growth, with an 11% increase year-over-year, excluding contributions from Aker. This growth was consistent across all geomarkets, which each saw a sequential rise of 5-6%. The strong performance in these markets contributed to revenues that were 1% higher than the consensus estimates.
During the second quarter, SLB also engaged in stock buybacks, repurchasing 9.9 million shares for a total of $465 million. Looking ahead, the company has reiterated its guidance for mid-teens EBITDA growth in 2024. SLB's management anticipates continued momentum in international markets, strong digital sales, and the benefits of their cost efficiency program to drive margin improvement in the second half of the year.
InvestingPro Insights
As SLB (NYSE: SLB) garners positive attention from Citi with a "Buy" rating and a price target of $62.00, a look at the real-time data from InvestingPro provides a deeper financial perspective. The company boasts a strong market capitalization of $70.02 billion and a P/E ratio of 16.02, which, although high relative to near-term earnings growth, reflects investor confidence. SLB's revenue growth also appears robust, with a notable 13.02% increase over the last twelve months as of Q1 2024.
InvestingPro Tips suggest caution due to analysts revising their earnings downwards for the upcoming period and the company's weak gross profit margins, standing at 19.97%. However, the stock's low price volatility and SLB's impressive track record of maintaining dividend payments for 54 consecutive years may offer some reassurance to investors. With analysts predicting profitability this year and a continued profitable streak over the last twelve months, SLB's financial health seems to be on a positive trajectory.
For investors seeking to delve deeper into SLB's financials, there are additional InvestingPro Tips available on: https://www.investing.com/pro/SLB. To access these insights and more, use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. In total, there are 8 more InvestingPro Tips that can guide your investment decisions regarding SLB.
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