KLR Group Starts Schlumberger (SLB) at Buy

KLR Group initiates coverage on Schlumberger (NYSE: SLB) with a Buy rating and a price target of $105.00.

Analyst Darren Gacicia commented, "We are initiating coverage of SLB with a Buy rating and $105 price target. We are buyers of SLB for four key reasons. First, the company has the scale, footprint and market power to gain leverage across geographic markets within a recovery of exploration and development activity. Second, SLB’s process and efficiency transformation programs, applied across a large scope of businesses, may improve margins and asset turns through efficiency gains. Third, SLB’s technology leadership may continue to support higher margins and longer product cycles relative to peers. Last, a gravitation towards performance/incentive-based business models may help SLB capture upside from improved client economics provided from the company’s platform and expertise. In addition to upside to the turn in the cycle, given its positive free cash flow profile, the stock also serves as a defensive play within the oil services group. Our 2016 EPS lies near consensus, which suggest trough scenarios are reflected in the stock. Our above consensus 2017 EPS, suggests room for upward revisions, which may offer an upside catalyst for the shares."

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 $69.82 yesterday.

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