SLB changes
Pick any two versions below to diff them.
- Price
- $50.38
- Discount category
- Close to intrinsic value
- Next earnings
- 2027-01-22
- Next earnings is estimate
- Yes
- Company name
- SLB
- Sector
- Oil and gas equipment and services
- About
- SLB gives technology and services to the energy industry across the life of oil and gas fields, from exploration to production. It reports four divisions. Digital sells software, such as the Delfi and Lumi platforms and Petrel, and digital operations. Reservoir Performance evaluates and stimulates reservoirs. Well Construction gives drilling services, drilling fluids and measurements. Production Systems sells production chemicals, artificial lift, subsea systems through SLB OneSubsea and other equipment. In July 2025, SLB bought ChampionX, which added production chemicals and artificial lift. SLB also has a Data Center Solutions business. In Q3 2026, revenue was $9,449 million: $6,993 million international and $2,401 million in North America. Olivier Le Peuch is Chief Executive Officer.
- Thesis
- SLB trades close to its intrinsic value because investors weigh the cut in Middle East activity in 2026 and the fear that customers will spend less on oil and gas wells against the recovery since Q2. In Q1 2026, SLB demobilized operations in a number of Middle East countries, and EPS excluding charges and credits fell 28% to $0.52. Since then, the business has recovered: in Q3 2026, revenue rose 6% to $9,449 million, Middle East revenue grew 13% from Q2, and EPS excluding charges and credits rose 16% from Q2 to $0.64. For the price to rise with value, three things must be true. Middle East activity must keep recovering. Deepwater and international work must grow in 2027, as SLB expects. Production Systems and Data Center Solutions must keep growing, and the Kelvion acquisition for about $3.4 billion must add profit without too much debt. The Q4 2026 report with the 2027 outlook, expected in late January 2027, is the next test.
- Risks
- Activity in the Middle East is not stable. Middle East and Asia revenue fell 6% from a year earlier in Q3 2026, and new disruptions can stop work again. Customers spend less on exploration and production when oil and gas prices fall. Pretax segment operating margin fell to 16.7% in Q3 2026 from 18.2% a year earlier. Net debt rose to $9,249 million at September 30, 2026 from $7,424 million at the end of 2025, and the Kelvion purchase adds about $3.4 billion in cash and $0.7 billion of debt. SLB works in many countries, including Russia and the Caspian region. Sanctions, conflicts and changes in currencies can lower revenue and profit. SLB must integrate ChampionX, the S&P Global Energy software business and Kelvion. Merger and integration costs were $165 million in the first nine months of 2026.
- Balance sheet
- Cash: $3.6B Debt: $12.8B Net debt: $9.2B Interest cover: 11× Debt due within 12 months: $1.7B SLB funds itself with notes, short-term borrowings and cash flow. At September 30, 2026, cash and short-term investments were $3,551 million. Short-term borrowings and the current portion of long-term debt were $1,653 million, and long-term debt was $11,147 million, so net debt was $9,249 million, against $7,424 million at December 31, 2025. Interest cover is pretax segment operating income divided by interest expense for the first nine months of 2026 ($4,301 million against $377 million). Cash flow from operations was $3,356 million in the first nine months of 2026, and free cash flow was $1,521 million. In the same period, SLB bought $1,755 million of its own shares and paid $1,305 million of dividends. The Kelvion purchase, expected to close in the first half of 2027, adds about $3.4 billion of cash payments and $0.7 billion of assumed debt. There were 1.476 billion shares outstanding at September 30, 2026. As of 2026-09-30.
- Checkpoints
- Oct 23, 2026: Q3 2026 results: Middle East recovery. Passed. Watch: Sequential growth in the Middle East and higher EPS excluding charges and credits pass; a further fall fails. Outcome: Middle East revenue grew 13% from Q2, and EPS excluding charges and credits rose 16% from Q2 to $0.64. Jan 22, 2027 (estimate): Q4 2026 results and 2027 outlook. Pending. Watch: An outlook for revenue and earnings growth in 2027 passes; a lower outlook fails. Jun 2027 (estimate): Kelvion acquisition closes. Pending. Watch: A close in the first half of 2027 at the agreed terms passes; a delay or a higher price fails.
- Recent events
- 2026-10-23: SLB reported Q3 2026 results. Revenue rose 6% to $9,449 million, GAAP EPS was $0.49 and EPS excluding charges and credits was $0.64, down 7% from Q3 2025 and up 16% from Q2 2026. Free cash flow was $828 million. The Board approved a quarterly dividend of $0.295 per share. 2026-09-01: SLB completed its acquisition of the geoscience and petroleum engineering software business of S&P Global Energy. 2026-08-31: SLB agreed to buy Kelvion, a company that makes thermal management and heat exchange equipment, for about $3.4 billion in cash and about $0.7 billion of assumed debt. SLB expects to close the deal in the first half of 2027. 2026-04-24: SLB reported Q1 2026 results. Revenue rose 3% to $8,721 million, but EPS excluding charges and credits fell 28% to $0.52. The company said that widespread disruptions in the Middle East caused it to demobilize operations in a number of countries. 2026-01-23: SLB reported full-year 2025 results. Revenue fell 2% to $35.71 billion, EPS excluding charges and credits fell 14% to $2.93 and free cash flow was $4.11 billion. The Board raised the quarterly dividend by 3.5% to $0.295 per share.