CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
Our 12-month target of $55, down $15, reflects a 9.6x multiple of EV to projected ’24 EBITDA, below SLB’s historical average. We think a discount is merited based on concerns regarding oil demand for ’24. As a result, we downgrade our rating based on fundamentals for ’24, as we believe that int’l activity will exceed North American activity throughout ’24, but not at the levels seen in ’23. We lift our ’23 EPS view by $0.01 to $2.96 and cut ’24’s by $0.13 to $3.59. We expect Q4 23 EPS of $0.83 vs. Q4 22 EPS of $0.71, with earnings to be reported on January 19. SLB’s fortunes are heavily tied to its int’l exposure, which accounts for around 80% of its total revenues. For ’24, we expect that int’l activity will outperform the North American markets; however, we don’t think it will see the same level of growth experienced in ’23. Yet, we think SLB’s margins should remain fairly insulated, supported by long-term contracts. We see SLB with FCF in the range of $3.8B in ’23 (vs. $2B in ’22) and $4.9B in ’24.