Seeking Alpha

Undervalued Schlumberger shares could rise 28%, Barron's writes

  • Despite a bright outlook, Schlumberger (SLB +1.2%) is undervalued by as much as 28%, Barron's writes; shares trade for 16x expected 2014 EPS of $5.70 and 13.5x 2015 estimated earnings, a discount to the S&P 500 as well as SLB's historical levels.
  • Global demand for oil continues to grow, but increasingly reserves are located in areas that are hard to drill, a long-term boon for SLB's leading technologies; in the nearer term, big oil companies will spend more money in 2014 than in 2013 on SLB's services, and SLB continues to progress with its efficiency and reliability initiatives.
  • SLB's international presence means it is more exposed to Brent crude oil prices, not WTI prices, which could suffer as U.S. product outstrips refining capacity.
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