Jefferies Downgrades Schlumberger (SLB) to Hold

Jefferies downgraded Schlumberger (NYSE: SLB) from Buy to Hold and cuts its price target to $90.00.

Analyst Brad Handler said the downgrade is "based on relative exposure to areas of risk that have largely been discussed to some degree in this note. These areas include 1) seismic (an estimated 4% of revenue, although this includes land seismic and processing); 2) Russia (estimated 7%); 3) Venezuela (estimated 2%); and 4) China (estimated ~1%)."

He added, "Further, offshore comprises an estimated 40% of revenue (admittedly including marine seismic), and deepwater an estimated 1/2 of that, and, again as we have expressed elsewhere in the note, we are concerned the medium term outlook for deepwater is likely to be compromised by the softer oil price in 2015 and potentially by the impact of the corruption scandal at Petrobras. All of the above, we think challenges estimates and SLB's peer-premium."

The firm lowered SLB 2015/2016 EPS to $5.10/$6.00 from $5.85/$6.55.

For an analyst ratings summary and ratings history on Schlumberger click here. For more ratings news on Schlumberger click here.

Shares of Schlumberger closed at $84.21 yesterday.

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