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 $56, up $1, reflects a 9.6x multiple of EV to projected 2024 EBITDA, below SLB’s historical average. We keep our 2024 EPS view at $3.59 and set 2025’s at $4.21. Q4 EPS of $0.86 vs. $0.71, beat consensus by $0.03. Q4 revenues (~$9B) grew 14% Y/Y, driven by its Production Systems segment (+33%). Q4 EBITDA margin (25%) rose by 95 bps, driven by its Reservoir Performance segment (+287 bps). SLB revealed its 2024 guidance for capex to be in the range of $2.6B (vs. $1.9B in 2023); however, we note that 2024’s guidance is the same as 2023’s (~$2.6B), which we think should insulate SLB from further revisions should activity growth surprise toward the upside. We estimate SLB with FCF in the range of ~$5B in 2024 (vs. $4B in 2023), with today’s newly revised dividend ($1.12/share vs. the prior annual dividend of $1.00/share) likely to chew up ~33% of FCF, leaving SLB room to reduce its net debt levels by 30% (~$8B at the end of 2023), if it so chose, assuming energy prices hold. Shares yield 2.3%.