Schlumberger stock and the industry
Schlumberger’s (SLB) one-year stock price fell 21.0% as of August 11, 2017. In the past year, the Energy Select Sector SPDR ETF (XLE) has fallen 7.0%. XLE represents the broader energy industry. The VanEck Vectors Oil Services ETF’s (OIH) one-year return was -20.0%. So SLB has underperformed both XLE and OIH in the past year. The Dow Jones Industrial Average (DJIA-INDEX) has risen 18.0% in the past year. The SPDR S&P 500 ETF (SPY) has significantly outperformed Schlumberger in the past year. SPY’s returns were 12.0% during that same period.
Crude oil price and rigs
Since August 11, 2016, WTI (West Texas Intermediate) crude oil prices have risen 10.0%. Taking a cue from the crude oil price strength, the US rig count rose 97.0% in the past year. You can find out more on crude oil production and prices in Market Realist’s series Refinery Demand and Crude Oil Inventories Drive Oil Futures. You may also want to read the prominent OFS (oilfield services and equipment) companies’ recent valuations, including National Oilwell Varco (NOV) and Halliburton (HAL), in Market Realist’s series SLB, HAL, NOV, WFT: How They Stack Up after 2Q17.
Recent events that could affect Schlumberger’s returns
- Schlumberger’s revenues and net income improved in its 2Q17 financial results released on July 21, 2017. Read more about this in Market Realist’s Why Schlumberger’s 2Q17 Earnings Beat Estimates.
- On July 20, 2017, SLB signed an agreement with onshore and offshore drilling and well services company Eurasia Drilling Company (or EDC) to acquire EDC’s 51.0% stake.
- Schlumberger signed a memorandum of understanding in May 2017 with Saudi Arabia’s Saudi Aramco.
- Weatherford International (WFT) and Schlumberger began working on a joint venture called OneStimSM in March 2017.
In this series, we’ll be looking at investors’ short interest in Schlumberger and SLB’s implied volatility. First, let’s look at the forecast for SLB stock.