SLB

SLB remains the global scale leader in oilfield services with deep customer integration across drilling, completions, production, and reservoir characterization, which supports resilient share through cycles. Strategically, it is leaning harder into software and digital workflows: the April 2026 definitive agreement to buy S&P Global Energy’s upstream geoscience and petroleum engineering software expands SLB’s subsurface/planning footprint, particularly in U.S. unconventional workflows. That shift can raise switching costs and margins over time, but it also increases execution risk as integration broadens beyond traditional services.

Financially, 1Q26 revenue was $8.72B (+3% YoY) with GAAP EPS of $0.50 and adjusted EPS of $0.52, both down materially year over year, signaling softer profitability despite modest growth. Adjusted EBITDA was $1.77B in 1Q26 versus $2.02B in 1Q25, and the quarter showed higher leverage metrics (debt-to-capital 48%). Valuation looks mid-20s P/E based on recent market data, which is not cheap for a cyclical name unless earnings re-accelerate; the dividend is $1.18/year (~2.1% yield).

Over the next 12 months, the bull case is a rebound in international activity and pricing plus tangible revenue/margin traction from digital/software (including the S&P portfolio) that improves mix. Key risks are weaker upstream spending, integration complexity in digital assets, and margin pressure if service intensity or pricing fades; the next major checkpoint is the July 24, 2026 earnings report. With the stock having traded as low as $31.64 in the last year, sentiment can move quickly on any guidance reset.

Recommendation: HOLD. The digital strategy and global franchise are attractive, but near-term earnings/margins have been trending weaker while valuation is only reasonable if growth reappears.