Schlumberger versus peers and the industry
Schlumberger Limited (SLB) is the largest US oilfield equipment and service (or OFS) company. Its stock price has risen in the past year. On May 21, SLB was trading at $75.03. This was ~4% higher than its price a year ago. We’ll analyze, in this series, what’s driving Schlumberger. Read a comparison of SLB with its lower-market-cap peer Halliburton (HAL) in Market Realist’s Schlumberger and Halliburton Compared to the Industry.
What Schlumberger’s stock price change suggests
Schlumberger’s one-year stock price was at its highest in January 2018. However, it lost steam and trended down until the first week of April. Since then, SLB’s stock has been trending up. SLB’s revenues declined sequentially in the first quarter after registering sequential growth in the past three quarters before Q4 2017. Its free cash flow generation weakened significantly in the first quarter. The resurgence of crude oil prices in the past year drove many oilfield services companies’ stock prices up. Despite revenue and a free cash flow slowdown, strong crude oil prices and SLB’s improved bottom line in the first quarter have kept its stock buoyant in the market.
Schlumberger’s moving averages
On May 21, Schlumberger’s stock price was at a 10.3% premium to the 50-day moving average (or DMA). On May 21, it was trading 11.5% above its 200-day moving average.
SLB’s short-run moving average surpassed its long-run moving average from May 2018. SLB’s stock price has been trading above its long-run moving average since mid-April, which suggests bullishness in SLB’s stock price.
In this series, we’ll analyze Schlumberger’s drivers, balance sheet, free cash flow, and dividend yield. We’ll start with Schlumberger’s management comments in the next part of this series.