Schlumberger NV (SLB) Price

Schlumberger Stock Performance Lags Nasdaq Composite Amid Q2 Declines

Schlumberger (SLB) has significantly underperformed the Nasdaq Composite and its peer over the past year, with recent Q2 earnings showing year-over-year revenue and EPS declines, despite beating consensus EPS estimates. Schlumberger Stock Performance Lags Nasdaq Composite Amid Q2 Declines Schlumberger Limited (SLB), a prominent player in the oilfield services sector, has experienced significant underperformance relative to the broader market and a key industry peer, despite exceeding consensus earnings per share estimates in its recent second-quarter results. The oilfield services giant's stock has shown a notable divergence from the robust gains observed in the technology-heavy Nasdaq Composite, raising questions among investors regarding its short-to-medium term trajectory. The Event in Detail Schlumberger stock has declined 22% from its 52-week high of $46.15, touched on October 10, 2024. While SLB gained 8.3% over the past three months, it significantly underperformed the Nasdaq Composite’s 11.6% surge during the same period. Over a longer horizon, SLB's performance remains more subdued, with stock prices declining 6.1% year-to-date and 12.9% over the past 52 weeks. In contrast, the Nasdaq Composite has seen a 12.4% uptick in 2025 and a 27.1% surge over the past year. Adding to the bearish trend, SLB stock has consistently traded below its 200-day moving average over the past year and below its 50-day moving average since April, albeit with recent fluctuations. Furthermore, SLB has also underperformed its peer, Baker Hughes Company (BKR), which recorded 12.9% gains in 2025 and a 36% surge over the past 52 weeks. Schlumberger's stock prices dropped 3.9% following the release of its mixed second-quarter 2025 results on July 18. While financials observed a slight improvement from the first quarter, they remained underwhelming on a year-on-year basis. The company reported a topline revenue of $8.5 billion, a 6.5% decrease year-over-year. Adjusted earnings per share (EPS) fell 12.9% year-over-year to $0.74, though this figure did exceed consensus estimates by 1.4%. Net income also decreased to $1.05 billion, down 8.5% from Q2 2024. Despite these declines, aggregated operating cash flows for Q1 and Q2 inched up 2.2% year-over-year to $1.8 billion, and free cash flow for Q2 2025 was $622 million, a significant increase compared to Q1 2025. Analysis of Market Reaction The continued underperformance of Schlumberger stock, despite beating EPS estimates, can be attributed to the year-over-year declines in both revenue and adjusted EPS. This indicates a potential investor caution in the oil & gas equipment & services industry, particularly for companies exhibiting contracting top and bottom lines on an annual basis. The consistent trading below key moving averages further reinforces a bearish sentiment among market participants. Industry analysts have pointed to several cyclical factors contributing to the decline, including reduced drilling activity in key regions such as Saudi Arabia, Mexico, and offshore Africa, along with a decrease in Latin American short-cycle activity. North American operations also saw softness due to seasonal factors and non-repeat exploration data sales. These issues are largely characterized as cyclical rather than systemic, linked to macroeconomic uncertainties, fluctuating oil prices, and temporary project pauses. Broader Context & Implications Schlumberger, valued at $47.3 billion by market cap, remains a leading global oilfield services company. The company is actively pursuing a strategic pivot towards digital innovation, production-focused growth, and energy transition, aiming to mitigate the impact of cyclical downturns and enhance long-term resilience. Its Digital & Integration segment, which boasted 32.8% pretax operating margins in Q2 2025, is highlighted as a growth engine that is "no longer bound by the traditional oil and gas cycle." A key strategic move has been the acquisition of ChampionX, which is expected to be accretive to margins and EPS in 2026, with anticipated annual pre-tax synergies of $400 million. For the second half of 2025, Schlumberger anticipates revenue between $18.2 billion and $18.8 billion, expecting steady performance from its legacy businesses and benefits from the ChampionX integration. However, EBITDA margins are projected to remain flat compared to Q2 due to the impact of tariffs. Despite the Q2 decline, the company's strong free cash flow and shareholder returns signal financial resilience. Expert Commentary Despite the noted underperformance, analyst sentiment remains largely positive. Among the 25 analysts covering SLB, a consensus "Moderate Buy" rating is maintained. The mean price target of $47.39 suggests a significant 31.6% upside potential from current price levels. This optimism appears to be underpinned by the company's strategic initiatives and its current valuation, which, with a forward price-to-earnings (P/E) ratio of 12x compared to the sector average of 15x and a 3.07% dividend yield, is considered an attractive entry point for long-term investors. Looking Ahead The performance of Schlumberger stock in the coming quarters will hinge on several critical factors, including the effectiveness of its strategic pivots, the successful integration of ChampionX, and the broader trends in global drilling activity and oil prices. A sustained bearish trend for SLB could affect sentiment for other large-cap companies within the energy sector, while a reversal, driven by strong operational execution and a more favorable cyclical environment, could validate analyst optimism and attract new investment to the stock. Investors will closely monitor upcoming economic reports and industry developments to gauge the trajectory of Schlumberger and the wider energy services market.