SLB (SLB) PT Lowered to $55 at RBC Capital; 'Closing CHX is a Key Event for the Stock'

RBC Capital analyst Keith Mackey lowered the price target on SLB (NYSE: SLB) to $55.00 (from $57.00) while maintaining a Outperform rating.

The analyst commented: "Our preferred US OFS list is: SLB (SLB), Baker Hughes (BKR), Atlas Energy Solutions (AESI), and we swap in Patterson-UTI (PTEN) for Liberty Energy (LBRT).

Closing CHX is a key event for the stock. SLB has received approval from US regulators, which included the highly expected sale of the US Synthetic drill bit insert business. Norway is taking a second round look at the combined business and resulting competitive landscape, which has taken longer than we originally expected, but is relatively small. UK regulators have provided an outside date of March 27 for their review, which, when combined with Norway could potentially move the close back to early May.

Lowering numbers. We have lowered our Q1 EBITDA by 1% to $2.036Bn and EPS from $0.78 to $0.74 on slightly lower margins. Our annual EBITDA estimate reduces by 2% to $9.231Bn on slightly later closing of CHX and lower Reservoir Performance and Well Construction activity due to softness in Saudi Arabia, West Africa, and Mexico."

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