2023-04-19 15:57:12 ET
Schlumberger ( NYSE: SLB ) is upgraded to Buy from Neutral with a $66 price target, raised from $48, at UBS, with growth driven by the company's high-margin Digital unit and 78% international revenue mix.
Based on SLB's ( SLB ) 2022 results, with the Digital segment generating 37%-42% operating margins, and the outlook for global capex to increase 10%-15% in 2023, UBS analyst Josh Silverstein sees the company on track to meet its 2021-25 financial targets, with upside if margins can reach prior upcycle peak levels.
Silverstein forecasts Schlumberger ( SLB ) returns 60%-70% of free cash flow to shareholders in 2023-27 while reducing net-debt-to-EBITDA from 1.4x at year-end 2022 to 0.5x at year-end 2025, with maintaining capex at 5%-7% of sales as the key support driver.
Schlumberger ( SLB ) +0.9% in Wednesday's trading as rival oilfield services company Baker Hughes reported better than expected Q1 adjusted earnings and revenues .
For further details see:
Schlumberger raised to Buy at UBS, sparked by high-margin Digital business