Schlumberger is the world's leading supplier of technology, integrated project management and information solutions to customers working in the oil and gas industry worldwide. The company was founded in 1926 and is based in Paris, France.
SLB Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Schlumberger Limited with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Schlumberger Limited ranked in the 13th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 86%. As for the metrics that stood out in our discounted cash flow analysis of Schlumberger Limited, consider:
The company's compound free cash flow growth rate over the past 5.73 years comes in at -0.16%; that's greater than only 10.54% of US stocks we're applying DCF forecasting to.
The company has produced more trailing twelve month cash flow than 90.14% of its sector Energy.
Schlumberger Limited's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -19.09. This coverage rate is greater than that of merely 6.22% of stocks we're observing for the purpose of forecasting via discounted cash flows.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
FET, NNA, XEC, CLB, and CLMT can be thought of as valuation peers to SLB, in the sense that they are in the Energy sector and have a similar price forecast based on DCF valuation.
Alongside major companies in the financial services and airline spaces, Schlumberger (SLB) in the energy services sector will be one of the first to report third-quarter results. The press release is scheduled to come out on Friday, October 16, ahead of the opening bell. Analysts are not holding their breath....
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