Street View: SLB's buyback pause may weigh on stock

ChampionX

22/04/2024 14:23

** Top U.S. oilfield services firm SLB  SLB.N  reported Q1
results last week that were in line with Wall Street estimates
    ** However, Q1 core profit came in at $2.06 bln, missing
expectations of $2.07 bln - LSEG data; shares closed 2.1% lower
on Friday at over one-month low of $49.85

    NORTH AMERICA WEAKNESS WEIGHS
        ** J.P. Morgan ("overweight") cuts PT to $64 from $65,
says SLB reiterated its 2024 global revenue outlook despite
softening activity in North America associated with weak natgas
prices and Aramco suspending ~20 jackup contracts for 2024,
which would be offset by additions in onshore gas activity
    ** TD Cowen ("buy 1") cuts PT to $63 from $64, highlights
concerns of maturing upstream spending being an overhang on
stock
    ** "SLB's pending acquisition of CHX (ChampionX) will
temporarily pause SLB's repurchase activity, until CHX's
shareholder vote, suggesting a significant acceleration in
buybacks in H2 2024"
    ** Citigroup (PT $65, "buy"): Says "SLB slumped on Friday
due to a disbelief that full-year guidance was still reasonable,
despite their mid-teens EBITDA growth guide"
    ** "While a resumption of the buyback during 2H post the CHX
shareholder vote should be helpful, an end to the estimate trims
appears most important for the SLB investment narrative"    
    

 (Reporting by Vallari Srivastava in Bengaluru)
 ((Srivastava.Vallari@thomsonreuters.com;))