CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We lower our 12-month target to $70, down $1, which reflects a 13.8x multiple of EV to projected ’24 EBITDA, a premium to peers. We think a peer premium is merited based on SLB’s peer-leading international and offshore exposure (80% of ’22 revenues vs. a peer average of 66%). We cut our ’23 EPS estimate by $0.04 to $2.95, and lift ’24’s by $0.02 to $3.72. Q3 EPS of $0.78 vs. $0.63, beat consensus by $0.01. Q3 revenue ($8.3B) grew 11% Y/Y, driven by its international segment (+12%). On Wednesday (October 18), the U.S. lifted most of its restrictions against Venezuelan crude for six months. While it is still in the early stages, we think SLB should stand to benefit against its peers, given its track record in the country before the sanctions and its ability to mobilize equipment and resources quickly. SLB noted that it expects its capex guidance for ’23 to remain unchanged (midpoint of ~$2.6B vs. $1.6B in ’22). We see SLB with FCF in the range of $3.2B in ’23 (vs. $1.4B in ’22) and $5B in ’24. Shares yield 1.7%.