What’s Schlumberger’s 7-Day Stock Price Forecast as of April 28?



Schlumberger’s implied volatility

On April 21, 2017, Schlumberger’s (SLB) implied volatility was 18.7%. Since it announced its 1Q17 financial results on April 21, 2017, Schlumberger’s implied volatility has fallen from 21.4% to its current level.

SLB makes up 3.2% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES). Read more about Schlumberger’s 1Q17 earnings in Market Realist’s Schlumberger’s 1Q17 Earnings Met Estimates.

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Implied volatilities of SLB’s peers

National Oilwell Varco’s (NOV) implied volatility on April 28 was ~28%, while Precision Drilling’s (PDS) implied volatility was ~51% on the day. McDermott International’s (MDR) implied volatility on April 28 was ~42%. SLB makes up 0.50% of the SPDR S&P 500 ETF (SPY).

SPY tracks the price and yield performance of the S&P 500 Index (SPX-INDEX). The energy sector makes up 6.3% of SPX-INDEX, which has risen 15% in the past year, compared to the 10% fall in SLB’s price.

Implied volatility and Schlumberger’s 7-day stock price forecast

Based on Schlumberger’s implied volatility and assuming a normal distribution of stock prices, a standard deviation of one, and a probability of 68.2%, SLB’s stock will likely close between $74.47 and $70.71 in the next seven days. SLB’s stock price was $72.59 on April 28, 2017.

What does implied volatility mean?

Implied volatility (or IV) reflects investors’ views on a stock’s potential movements. However, IV doesn’t forecast the direction of these movements. IV is derived from an option pricing model. Investors should note that the correctness of implied volatility’s suggested prices can be uncertain.

Energy stocks are typically correlated with crude oil’s price. What’s SLB’s correlation with crude oil? Let’s find out in the following part of the series.


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