SLB Stock Prediction: Perspectives for Investing in the Oil & Gas Industry

motek 1This SLB stock forecast article was written by Yutong Li – Analyst at I Know First, Master’s candidate at Brandeis University.


  • SLB’s stock has grown by some 28% in the past 1 month, and 66% since January 2021
  • Its leading position and continuous growth in the oilfield service industry worldwide make it a preferable long-position stock
  • My predicted target price for SLB in June will hit $38, following the increasing trend in May 2021

Overview of Schlumberger

Schlumberger is an oilfield service company that provides technology solutions for reservoir characterization, drilling, production, and processing to the oil and gas industry worldwide. The business provides a comprehensive variety of products and services, including surface and downhole logging, reservoir testing, drilling services, well services, interpretation and consulting services, and some integrated projects, etc. Schlumberger was founded with the idea of electric field innovation and by Conrad and Marcel Schlumberger brothers in 1926. It keeps growing and bringing new technologies that benefit the world’s oil and gas production, and by now, the company has become one of the leading firms within the industry and has been expanding to markets worldwide.

Schlumberger is Becoming a Global Platform


With the increasing demand for oil and gas, Schlumberger has shifted its focus from North America to other countries worldwide. It has more than 82,000 employees coming from 170 different nationalities and working in more than 120 countries and also has 90 technology centers across the world. By Schlumberger’s First-Quarter 2021 Reports announced on its website, we could notice that, by March 31, 2021, Schlumberger made a worldwide revenue of $5.2 billion. The international revenue was $4.2 billion, and the North American revenue was $972 million, so the international revenue is approximately 4.3 times more than its North American revenue. Compared to the company’s 2020 first-quarter revenue report, it has an increase in the international revenue sector by 12%.

Thus, I think Schlumberger has been increasing its international presence and will continue to expand larger globally, and international expansion to emerging markets is a potential path for its growth and leading power in the world.

Now it is reasonable to take a closer look at some financial ratios of Schlumberger and compare those values with its rivals. Currently, Halliburton(HAL), National Oilwell Varco (NOV), and Dynamic Materials Corporation (BOOM) are Schlumberger’s primary competitors in the world. They have a comparable business model and are seen as the top powerful companies in the oilfield industry.

Based on the data collected on the WSJ website, SLB has an annual operating margin of 5.07%, which is higher than the industry average in 2020, and other rivals’ operating margins. A higher operating margin, in general, implies that SLB is more profitable, and it makes more money from its ongoing operations to pay for costs. In terms of liquidity measurement, SLB has an average current ratio of 1.23, lower than the current ratios of other competitors. This indicates that those companies repaid their debts quicker annually and had a slightly higher operational efficiency than SLB. However, SLB’s current ratio greater than 1 is still a good sign, and it also outperformed the industry average, which also represents a healthy and safe financial status.

The valuation using ratios is another way to assess a stock’s attractiveness of an investment. According to the data,  SLB has a yearly average P/S ratio of 1.29, a little lower than the industry average, and a P/B ratio of 2.52 greater than the industry average values but lower than HAL and BOOM.

SLB and its competitors' average PS & PB ratios in 2020

Thus, the ratios we have analyzed give us a sense of how SLB’s financial results and performance are compared to its rivals and the industry average. Overall, SLB has outperformed the industry averages in terms of Profitability, Liquidity, Valuation Ratios. Also, with an apparent high Profitability Ratio, SLB has a strong advantage over other companies at profit-generating efficiency.

Schlumberger’s Leading Strengths in the Industry

SLB technology

Schlumberger is one of the worlds’ top oilfield companies and it is important to highlight their successful strategies and strengths in the oil and gas industry. First, it has an automated solution, which accelerates its drilling and other operations, and reduces the costs. On May 10, 2021, Schlumberger announced the collaboration with NOV of Automated Drilling Solution. This decision integrates NOV’s rig automation interface with its own drilling automation solutions, which enables the automation of manual workflows, improves safety, and allows for consistency in product quality. Moreover, with an automated process, the business could easily adjust their production scale based on the demand of the market and avoid unnecessary costs and wastes of resources.

In addition, Schlumberger has a large number of experienced and skilled employees. On its website, it shows that there are 93% of executives with over 20 years of experience. And the company has invested greatly in employee training.

As we discussed earlier, Schlumberger has a diversified workplace, with people coming from different countries and different cultural backgrounds. Workforce diversity could help the business absorb different opinions from individuals and get shared values of how to negotiate, collaborate, and interact with other businesses. 

Schlumberger is taking good advantage of social media. It has millions of followers on LinkedIn, Facebook, Twitter, and Instagram. It constantly uploads posts and inspirations and has a good amount of engagement from its followers. 

Most importantly, Schlumberger has been an innovative and technology-oriented company since its establishment 90 years ago. It has a well-established IT system for its research and development. It is using robust real-time data to bring technology insights and lifecycle management. The team is also leveraging the cloud power and connectivity of the industrial Internet of Things (IIoT) to enable more automation and fulfill the needs of customers.

How Did SLB Deal with COVID-19

SLB stock price from July 2020 to June 2021

From the above graph, the SLB stock price has an increasing trend in general, and no apparent seasonality over the past year. In November 2020, there was a sudden drop in the stock price, which is likely due to the impact of the COVID-19 as some projects might have to be delayed or due to some quarantine requirements. 

Fortunately, the pandemic did not stop Schlumberger from working and developing. It has actively found solutions to the COVID-19 outbreak and has implemented management plans to ensure supply chain continuity and workplace safety. To improve people’s safety, it takes approaches including human exposure reduction, geography-specific preparations. And in terms of supply chain continuity, it is actively doing risk assessments, developing more alternative suppliers, making decisions on delivery dates and transportation. To improve operations integrity, it also tries to enable more remote operations and finds conditions-based maintenance for equipment integrity. Schlumberger’s COVID response turned out to be effective; after November 2020, the stock price has renounced again and has been increasing. And since mid-April 2021, the stock price is increasing faster, which might be related to, as mentioned earlier, its collaboration with NOV of automated drilling, technological development, and innovation, and might also be due to the COVID-19 getting better control. From the graph, we could also notice that since around May 2021, the stock return also surpassed the 50-day and 20-day moving averages, thus indicating a bullish sign. In addition, with the COVID-19 vaccines being more accessible to the public, we are expecting a better control of the virus, so the economics are expected to be recovered and SLB’s growth is likely to be continued.

Therefore, even though the COVID-19 could potentially impede Schlumberger’s growth and development, its outbreak management plan enables it to quickly adapt to the changing situation and continue its work in an effective manner. And based on its current trend, our SLB stock prediction could still be promising.


As we discussed, Schlumberger’s international exploration and innovative spirit enabled the company to grow a worldwide presence. Its leading position and continuous growth in the oilfield service industry, therefore, makes it a preferable long-position stock. 

My prediction of SLB stock hitting price is $38 within the following month in June. Based on I Know First’s AI-based forecasts above, its relatively high signal of 4.44 and predictability of 0.4 on a 1-month forecasting horizon both serve as evidence for my target price SLB stock prediction. Given a closer look at the forecasts, SLB also has an extremely strong buy signal on the 1-year time horizon, which also indicates that SLB is a great long-term investment if the oilfield industry is recovering from the pandemic.

Past Success with SLB Forecast by I Know First

On February 4th, 2021, I Know First came up with an SLB stock prediction as one of the top-10 S&P 500 stocks and recommended a long position. The AI-based algorithms by I Know First have successfully predicted the stock’s patterns and the performance of SLB stock prediction on a 1-month time horizon has reached 18.20%, which is 19.81% higher than the S&P returns (-1.61%).

I Know First's top-10 S&P stock forecast package as a successful case
I Know First's 1-year Historical Price forecasts
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