SLB is Wednesday's IBD Stock Of The Day, as the oilfield service giant moved above a buy point with U.S. oil prices hitting year highs and natural gas prices surging. SLB stock advanced.
West Texas intermediate crude oil futures climbed about 1% to more than $84 per barrel Wednesday, the highest since August 2022, amid growing concerns of low supply.
U.S. natural gas prices surged 7% Wednesday, topping $3 per million British thermal units, up 17% for the week. The Energy Information Administration reported Tuesday that U.S. natural gas production and demand will rise to record highs in 2023.
SLB CEO Optimistic About Industry
SLB, formerly known as Schlumberger, is one of the world's largest providers of on- and offshore drilling services. It also provides technology for well drilling, production, and oil and gas processing.
On July 21, SLB narrowly topped Q2 profit expectations but missed on revenue. SLB earnings — along with recent financials from rivals Baker Hughes and Halliburton — point to slumping U.S. oil-drilling activity, while international activity is increasing.
However, SLB Chief Executive Officer Olivier Le Peuch told analysts he remains optimistic about the long-term outlook.
"We continue to see positive upstream investment momentum in the international and offshore markets," Le Peuch said.
"These markets are being driven by resilient long-cycle offshore developments, production capacity expansions, the return of global exploration and appraisal, and the recognition of gas as a critical fuel source for energy security and the energy transition," Le Peuch added.
Analysts see third-quarter earnings growing 22% to 77 cents per share with sales increasing 12% to $8.34 billion. SLB has averaged 69% profit growth over the past four quarters.
For the year, Wall Street predicts SLB profit will grow 37% to $2.98 per share as sales increase 17% to $32.88 billion.
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SLB Stock Action
Shares gained 1.7% to 59.51 Wednesday during market trade. That put SLB stock in a buy zone above what MarketSmith analysis pinpoints as a 58.70 buy point in a cup-with-handle base.
On Tuesday, SLB stock fell during intraday trade but found support at its 21-day exponential moving average. Last month, on July 7, SLB soared nearly 9%, moving past its 200-day moving average in volume 135% above average.
SLB stock ranks second in the Oil & Gas-Field Services industry group. Shares have a 98 Composite Rating out of 99. SLB stock has a 90 Relative Strength Rating, an exclusive gauge for share-price movement. The EPS Rating for SLB stock is 89.
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