Schlumberger NV (SLB)

Conclusion

SLB N.V. provides technology and services to the energy industry through four divisions: Digital & Integration, Reservoir Performance, Well Construction and Production Systems. At 50.38 USD on 9 November 2026, the shares have a market capitalisation of 74.36 billion USD.

The verdict is fair. Today's multiples sit close to their own ten-year medians: EV/EBITDA is 11.6x against a median of 12.3x, and P/E is 24.2x against a median of 22.7x. The discounted cash flow gives 63.91 USD per share at a discount rate of 8.87%. The fair value band runs from 46.10 to 69.15 USD, with a midpoint of 57.62 USD and a margin of safety of 14.4% at the current price. The reverse DCF implies growth of 3.9% a year, against revenue growth of 8.6% a year over five years and free cash flow per share growth of 19.7% a year.

The strongest numbers are net debt to EBITDA of 1.28x, interest coverage of 8.7x and free cash flow conversion of 145.6% on a trailing twelve-month basis. The weakest are ROIC of 10.0% against a WACC of 8.2%, which is a narrow gap, and three-year EPS compound growth of -2.0%. Analysts have also cut current-year estimates, with 20 downward revisions against 3 upward in the last 30 days. If earnings fail to recover, the multiples that look fair today would look expensive.

Financial health

Financial health is green, because most of its measures are assessed good. The current ratio is 1.39 and the quick ratio is 0.90, while net debt to EBITDA is 1.28x and interest coverage is 8.7x on a trailing basis. Debt to equity is 0.49. The Altman Z-score is 3.05, in the safe zone, although that model was designed for manufacturers, so the reading is indicative only. Insolvency risk: low, about 0.2% by the estimate of the Ohlson model over one to two years. Debt has fallen against revenue over five years, with a change of -14.8% as of 31 December 2025, which supports the picture of a company that is not stretched by its borrowing.

Earnings quality

Earnings quality is green, supported by strong cash conversion and a low accrual ratio. Free cash flow conversion is 145.6% on a trailing basis and 109.8% over five years. The accrual ratio is -6.1%, meaning reported earnings are backed by cash. Stock-based compensation is 0.9% of revenue, and free cash flow after it is 4.15 billion USD. The share count has risen at 1.4% a year over five years, so there have been no net buybacks. The Piotroski score is 4 out of 9. The Beneish M-score is -2.51, which is consistent with a low likelihood of earnings manipulation. Seven of the last eight quarters beat estimates, with an average surprise of 3.2%, but current-year estimates have been cut by 2.3% over 90 days.

Profitability

Profitability is yellow. Margins are above their own ten-year medians: gross margin is 16.3% against 14.6%, operating margin is 12.6% against 10.9%, and net margin is 8.3% against 7.4%. ROIC is 10.0%, against a WACC of 8.2%, which gives a ROIC minus WACC value of 1.9%, labelled neutral. The five-year median ROIC is 14.2%, so returns have compressed. Return on equity is 11.8%. The DuPont split shows a net margin of 9.4%, an asset turnover of 0.65 and an equity multiplier of 2.10 as of 31 December 2025. Returns are therefore earned mainly from margins and only modestly from leverage, which makes the 11.8% return on equity a fair reflection of underlying performance.

Growth

Growth is yellow, because revenue growth is solid while earnings growth is weak. Revenue has compounded at 8.3% over three years, 8.6% over five years and 0.1% over ten years. Revenue grew in 6 of the last 10 comparable years. EPS has compounded at -2.0% over three years and 3.3% over ten years. Free cash flow per share has grown at 29.8% over three years and 19.7% over five, but it has declined at 3.7% over ten. Consensus expects next-year EPS to grow 25.5%, although the next-year estimate has been revised down 4.5% over 90 days.

Valuation

Valuation is yellow, with a neutral reading that puts the shares close to fair value. Against their ten-year medians, P/E is 24.2x against 22.7x, a premium of 6.8%. EV/EBITDA is 11.6x against 12.3x, a discount of 5.7%. P/FCF is 16.6x against 16.9x, a discount of 1.9%. P/S is 2.02x against 2.15x, a discount of 6.2%. P/B is 2.85x against 2.83x, a premium of 1.0%. The DCF gives 63.91 USD per share at a discount rate of 8.87%, with 58.2% of its value in the terminal value. The fair value from historical multiples is 51.34 USD. The reverse DCF implies growth of 3.9%, against revenue growth of 8.6% and free cash flow per share growth of 19.7% over five years. The fair value is an estimate built on fixed assumptions, not a price target. The dividend yield is 2.3%, and the payout on free cash flow is 38.7%.

Risks

The main risk is earnings. ROIC of 10.0% sits only 1.9 points above the WACC value of 8.2% on the given measure, so a further fall in returns would leave little room above the cost of capital. Three-year EPS growth of -2.0% and the 4.5% cut in next-year estimates suggest that the free cash flow strength is not yet translating into profit growth. A decline in free cash flow would weaken the DCF, and the fair value band rests on it. The insolvency estimate and the Altman reading are low-risk signals, but they are based on a model designed for manufacturers. Some values are not available: the company does not report a debt maturity schedule, and this analysis has no revenue split by segment, so it cannot show which divisions drive growth or margins.