KLR Group reiterated a Buy rating on Schlumberger Ltd. (NYSE: SLB), and raised the price target to $106.00 (from $103.00). SLB stated that declining US and international production rates may eliminate market oversupply by the end of 2016. A lack of spending and upstream activity creates potential for a significant supply challenge in coming quarters. Also, as the commodity market tightens, the impending upturn in activity may absorb excess equipment capacity and lead to pricing power for service companies.

Analyst Darren Gacicia commented, "We are adjusting our 2Q16/2016/2017 EPS to $0.24/$1.37/$3.22 from $0.39/$1.58/$2.70. We are raising our PT to $106. Given the change in SLB's reporting format, we have reconstructed our model to forecast by business segments rather than geographic regions. Near term pressure on activity and margins lowers our 2Q/16 EPS. Our calibration of inflection of activity raises our 2017 EPS. Given new model constructs and CAM acquisition, we expect a break-in period for KLR and consensus estimates."

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Shares of Schlumberger closed at $79.93 yesterday.