Schlumberger's profits should gush - Barron's

Barron's cover story is positive about oil-services giant Schlumberger (NYSE:SLB), whose recent acquisitions have catapulted SLB into a position of leadership in extracting liquids from shale basins, part of the booming business in hydraulic fracturing that's reshaping the industry.

The acquisitions fix one of the company's few week spots, and should put it further ahead of smaller rivals like Halliburton (NYSE:HAL) and Baker Hughes (NYSE:BHI).

CEO Paal Kibsgaard believes SLB can achieve a 10x increase in operational reliability, reduce inventory levels by 25%, boost asset utilization by 100%, raise productivity by 20%, and lower unit support costs by 10%. By 2017, he expects to boost EPS to $9-10 (from $5.70 this year).

Despite an 18% gain this year, shares looks cheap at about 9x estimated 2015 EV/Ebitda and eight times estimated 2016 EV/Ebitda vs. a historical multiple of 10 to 11.

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