Rothschild Redburn Starts SLB (SLB) at Buy

Rothschild Redburn analyst Sebastian Erskine initiates coverage on SLB (NYSE: SLB) with a Buy rating and a price target of $48.00.

The analyst comments: "Shares have derated materially, with the two-year forward consensus EV/EBITDA multiple falling from 10.8x in September 2023 to 7.2x today, c27% below its long-run average. However, SLB has reshaped its business in recent years, disposing of capital-intensive assets and adding exposure to less cyclical areas through the acquisition of ChampionX. Supported by a recovery in the cycle, our analysis of the outlook for Production Systems (SLB's largest division) drives EBITDA forecasts that are c6-9% ahead of consensus in 2027-28. Our DCF-derived target price of $48 implies a 2027 EV/EBITDA multiple of just 7.4x and a 12-month TSR of 35%. We see several catalysts that will drive this rerating, including a return to earnings upgrades and rising FCF and distributions. We launch coverage with a Buy recommendation."

For an analyst ratings summary and ratings history on SLB click here. For more ratings news on SLB click here.

Shares of SLB closed at $36.06 yesterday.

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