1. Schlumberger Limited. (NYSE:SLB)
Average Analyst Estimates as of May 28: $66.94
Average Analyst Upside as of May 28: 46.43%
P/E Ratio: 15.23
Schlumberger Limited (NYSE:SLB) is a leading global energy technology provider with operations worldwide. The company is organized into four main divisions: Digital & Integration, Reservoir Performance, Well Construction, and Production Systems.
Earlier this April, Schlumberger Limited (NYSE:SLB) has agreed to acquire rival oilfield service provider ChampionX Corp. in an all-stock deal valued at $7.8 billion. This acquisition will enhance SLB’s technology portfolio as U.S. drillers invest more to maintain output from aging shale wells. The deal values each ChampionX share at $40.59, representing a nearly 15% premium over the April 1 closing price.
Analysts recently evaluated Schlumberger Limited (NYSE:SLB) and provided their 12-month price targets, with an average target of $66.94. Estimates ranged from a low of $53.00 to a high of $81.00. This new average represents a 54.95% increase from the previous average target, indicating an overall bullish outlook on the stock.
As of the end of the March quarter, 66 hedge funds reported owning stakes in Schlumberger Limited (NYSE:SLB). The largest stakeholder during this period was Boykin Curry’s Eagle Capital Management, which holds a $1.8 billion stake in the company. The stock takes top place on our list of the best undervalued energy stocks to buy according to analysts.
Artisan Value Fund stated the following regarding Schlumberger Limited (NYSE:SLB) in its fourth quarter 2023 investor letter:
“On the downside in Q4, our two energy holdings, Schlumberger Limited (NYSE:SLB), the world’s largest oil services company, and EOG Resources, a US shale-focused E&P company, were weak along with the broader sector. We have stringent criteria for business quality, which is particularly important in commodities sectors as these businesses do not control the underlying commodity prices, which can be volatile. We expect Schlumberger to continue to successfully navigate market volatility and deliver on its free cash flow and profit margin growth objectives from combination of activity growth and pricing gains. The stock has been among our top contributors since we initiated our position in December 2020.”
While we acknowledge the potential of energy stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SLB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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