SLB LIMITED/NV (SLB): what the price assumes

In the published model solve dated 2026-Q2, anchored at $57.61, SLB LIMITED/NV (SLB) is priced for +13.1% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-11.

Generated: 2026-08-30 · Source: https://boothcheck.com/report/SLB

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Solve inputs: computed at a 10.4% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

Every valuation family lands below the price. The price therefore sits beyond what those standard frames encode.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that call it expensive: Asset, Earnings, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.4%); the inversion above states its own rate.

Per-Model Detail (n=11)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Operating profit is negative or near zero and the company has no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so years-to-repay cannot be computed honestly.

Operating profit is negative or near zero and there is no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so interest coverage cannot be computed honestly.

Bullet Takeaways

• SLB is the largest oilfield-services franchise, now tilted toward steadier production-linked revenue by the ChampionX deal, which the 10-K sizes at "approximately $3.4 billion" of 2024 revenue (accession 0001193125-26-021017); Production Systems grew 23% in Q1 2026 while the core business ex-acquisition shrank 7%.

• The biggest near-term risk is the Middle East, where conflict-driven demobilizations cost roughly 6 to 9 cents of Q1 EPS and management guided disruptions persisting into mid-Q2, right as every static valuation method already reads the price as rich against trailing earnings.

• Watch the July 24, 2026 second-quarter report for Middle East restoration pace, North America holding flat as guided, and whether free cash flow (about $4.7 billion trailing) keeps covering the dividend and buyback without leaning on the balance sheet.

Bull Case

Every family of valuation method lands below SLB's $47.77 price (July 2026), and the bull case is about why the market keeps paying anyway: the methods are all reading a trailing year that management and most of the street treat as a trough. Trailing earnings carry a first quarter in which Middle East conflict disruptions forced SLB to demobilize operations in several countries, clipping roughly 6 to 9 cents from quarterly earnings per share. The core business excluding acquisitions shrank 7% in that quarter, yet the market is paying about 12 times operating income, a multiple that requires only about 7% annual operating growth for five years, a pace within what SLB has recently delivered and a multiple sitting in the lower half of its own peer range. The market is underwriting normalization, not heroics.

The portfolio SLB normalizes into is broader than the one that entered the downturn. The ChampionX acquisition closed in mid-2025 and brought a production-chemicals franchise the 10-K sizes precisely: "ChampionX recorded revenue of approximately $3.4 billion in 2024 and $2.0 billion during the period from January 1, 2025 to July 31, 2025" (FY2025 10-K, accession 0001193125-26-021017). That acquisition is already visible in the mix: Production Systems revenue rose 23% year over year to $3.51 billion in the first quarter. Production chemistry earns on producing wells rather than new drilling, which shifts revenue toward the steadier end of the cycle. On top sits the digital layer, where the filing describes software "agnostic to equipment provider" that enables "automation and autonomy to reduce costs and improve performance" (accession 0001193125-26-021017); software sold to an industry cutting costs is a business that grows precisely when drilling budgets do not.

The financial engine underneath is what lets a cyclical wait out its own cycle. SLB generated about $4.7 billion of free cash flow over the trailing year against net debt of $6.9 billion, roughly one year of operating income, with interest covered about 12 times. The filing states the priority order for that cash plainly: reinvest for growth or return it "to shareholders through dividend payments or share repurchases" (accession 0001193125-26-021017). A market-share leader coming off a demonstrably disrupted quarter, generating that kind of cash, priced at a below-peer multiple, is the setup where patience has historically been paid: the bet is that Middle East activity restores, deepwater long-cycle projects keep sanctioning, and the trailing year proves to be the wrong base to capitalize.

Bear Case

The competition is not standing still while SLB waits for its cycle. Halliburton's own filing reports total revenue down 3% in 2025, international down 2%, and North America down 6% (HAL FY2025 10-K, accession 0000045012-26-000015), which is what an industry-wide activity contraction looks like from the other side of the bidding table: two scaled service giants and a long tail of regional players chasing fewer rigs with idle crews. In that environment pricing erodes first and recovers last. SLB's first quarter showed the same gravity, with core revenue excluding the ChampionX contribution down 7% year over year and Well Construction, its largest drilling-linked division, down 6% to $2.8 billion. Acquired revenue is masking a shrinking base.

The structural warning sits in SLB's own risk factors: "The oil and gas industry has historically experienced periodic downturns, which have been characterized by diminished demand for our products and services and downward pressure on the prices that we are able to charge" (FY2025 10-K, accession 0001193125-26-021017). That sentence is doing a lot of work at today's price, because no standard valuation family reaches $47.77. The steadier reads are far below: earnings-power methods land around half the price, peer and sector multiples similarly, and even forward-looking cash-flow projections built on the trailing year's flat revenue fall short. Valued on its five-year average operating profit, which includes both trough and recovery years, the price is nearly triple what the business has demonstrated through a cycle. The market is paying trough-multiple prices for peak-adjacent earnings, which is the classic cyclical trap in reverse.

Integration and geography add execution risk to cycle risk. The filing is explicit that "The success of the ChampionX acquisition will depend on, among other things, our ability to combine our business with that of ChampionX in a manner that facilitates growth opportunities and realizes anticipated synergies" (accession 0001193125-26-021017), and the all-stock structure has the share count drifting up about 1.4% a year while integration proceeds. Meanwhile the Middle East, SLB's premier growth geography of the last cycle, is now the source of demobilizations, suspended travel, and an explicit warning that disruptions persist into the second quarter. If restoration takes quarters rather than weeks, or if North American activity stays flat as guided, the roughly 7% annual operating growth the price requires has to come from a shrinking core, a diluting share count, and a region under conflict. That is a lot of things going right for a stock every static method already calls expensive.

Valuation

The market pays about 12 times operating income for SLB, and inverted into an assumption, $47.77 requires operating growth of roughly 7% a year for five years. Two facts frame that requirement honestly. It is within what SLB has recently delivered, and the multiple sits in the lower half of the oilfield-services peer range, so the priced-in assumption reads as broadly consistent with plausible outcomes for the sector leader. What makes the picture unusual is that despite the moderate requirement, not one valuation family actually reaches the price on trailing numbers: peer multiples land around half of it, earnings-power reads similarly, asset-based views about 40% below, and even the forward projections fall modestly short, with the exit-multiple variant coming closest at $46 against the $47.77 print. When every family is short but none catastrophically, the price is a bet that the trailing base year understates the business, which is precisely the company's own account of a quarter disrupted by Middle East demobilizations.

The composition of revenue is shifting under the multiple. Production Systems grew 23% to $3.51 billion in the first quarter on the ChampionX consolidation, while Well Construction fell 6% to $2.8 billion. The filing quantifies what was bought: "ChampionX recorded revenue of approximately $3.4 billion in 2024" (FY2025 10-K, accession 0001193125-26-021017), production-linked revenue that cushions drilling cyclicality. The 10-K also notes 2024 full-year revenue of $36.3 billion grew 10% with "Approximately 46% of this increase" coming from the Aker subsea acquisition (accession 0001193125-26-021017); acquisitions have been carrying a meaningful share of SLB's reported growth for two years running, which is worth holding in mind when extending the growth rate forward.

Solvency does not constrain the story. Net debt of about $6.9 billion runs near 1.1 times trailing pre-tax operating income, interest is covered about 12 times, and free cash flow of roughly $4.7 billion funds the dividend, buybacks, and integration without strain. The share count edging up about 1.4% a year from the all-stock ChampionX deal is the one dilutive note. The decisive question the price poses is narrow: whether the first quarter's disrupted, core-shrinking print is the trough of this cycle or a preview of a flatter one. The July 24 second-quarter report answers a third of it.

Catalysts

July 24, 2026 is the date that matters: SLB reports second-quarter results at 7:00 a.m. Eastern with the call at 9:30. Management has pre-framed the quarter: Middle East disruptions persisting into mid-quarter, sequential declines there offset by growth in other international markets, and flat North America revenue. The print therefore scores three things at once: how fast demobilized Middle East operations restore, whether deepwater and other long-cycle international work is absorbing the slack, and the first clean quarters of ChampionX inside the Production Systems line, which grew 23% year over year to $3.51 billion in Q1.

The first quarter set a low bar. Revenue of $8.72 billion grew 3% year over year, but net income fell 6% to $752 million with GAAP earnings of $0.50 per share, and the conflict disruptions carried an estimated 6-to-9-cent EPS cost as SLB suspended travel through the region and pulled crews in several countries at customers' request. Management framed the recovery path around supporting customers as they restore production capacity, alongside increased short-cycle investment in North and Latin America and long-cycle deepwater developments.

The street remains firmly constructive, with 18 of 25 covering analysts at Strong Buy, a stance that leans on the same normalization thesis the growth-crediting math requires. The watch items beyond the print: any announced restoration of Middle East activity (each country remobilized is direct revenue), ChampionX synergy milestones, and the capital-return cadence, since the dividend plus buyback program is the mechanism that pays holders while the cycle argument resolves.

Peer Cohorts (Per Segment, With Filing Citations)

Digital (reported)

• HAL (HALLIBURTON COMPANY)
• FY2025 10-K: …include analytics, automation, and cloud services. Our digital technologies and services, and those of our customers and suppliers, are subject to the risk of cybersecurity incidents and, given the nature of such incidents, some can remain undetected for a period of time despite efforts to detect and respond to them…
• FY2025 10-K: …: Our total revenue decreased 3% in 2025 as compared to 2024 . Our International revenue decreased 2% and our North America revenue decreased 6% in 2025 compared to 2024 . Overall, our Completion and Production and Drilling and Evaluation operating segments finished the year with 17% and 15% operating margins,…
• OII (OCEANEERING INTERNATIONAL INC)
• FY2025 10-K: …are expenses not associated with a specific business segment. These consist of expenses related to our incentive and deferred compensation plans, including restricted stock units, performance units and bonuses, as well as other general expenses, including corporate administrative expenses. We intend to continue our…
• FY2025 10-K: …Africa, utilizing owned and chartered vessels; • IWOCS and RWOCS; • diving services; • decommissioning services; • project management and engineered solutions; and • drill pipe riser services and systems and wellhead load relief solutions. OPG revenue: Amount Percent of Total Revenue (in thousands) 2025 $ 616,045 22…
• LBRT (Liberty Energy Inc.)
• FY2025 10-K: …the equipment is redeployed at similar utilization or pricing levels. We are subject to cyber security risks. A cyber incident could occur and result in information theft, data corruption, operational disruption and/or financial loss. The oil and natural gas industry has become increasingly dependent on digital…
• FY2025 10-K: …natural gas ("CNG") delivery, data analytics, related goods (including our sand mine operations), and technologies to facilitate lower emission completions, thereby helping our customers reduce their emissions profile. We have grown from one active hydraulic fracturing fleet in December 2011 to approximately 40…

Reservoir Performance (reported)

• HAL (HALLIBURTON COMPANY)
• FY2025 10-K: …: Our total revenue decreased 3% in 2025 as compared to 2024 . Our International revenue decreased 2% and our North America revenue decreased 6% in 2025 compared to 2024 . Overall, our Completion and Production and Drilling and Evaluation operating segments finished the year with 17% and 15% operating margins,…
• FY2025 10-K: …where revenue is recognized on future performance of service. Deferred revenue, as well as revenue recognized during the period relating to amounts included as deferred revenue at the beginning of the period, w as not material to our c onsolidated financial statements. Transaction price allocated to remaining…
• LBRT (Liberty Energy Inc.)
• FY2025 10-K: 634.1 million for the year ended December 31, 2025 compared to $921.6 million for the year ended December 31, 2024. The decreases in EBITDA and Adjusted EBITDA primarily resulted from lower pricing and changes in activity levels in 2025 as described above under the captions Revenue , Cost of Services, and General and…
• FY2025 10-K: …leader in completions design innovation and application. Our management team has an average of over 20 years of energy services experience. We believe technical innovation and strong relationships with our customers and suppliers distinguish us from our competitors and are the foundations of our business. We expect…
• PUMP (ProPetro Holding Corp.)
• FY2025 10-K: …equipment installed at customers' sites. These services are generally provided through contractual arrangements in which we set a price per unit of power generated or a price per period and a minimum quantity of power per period under our contracts. We are also paid cost plus a predetermined margin for other related…
• FY2025 10-K: …generation equipment, including turbine generator sets, reciprocating engines, auxiliary equipment and battery energy storage solution equipment. As of February 19, 2026 we had total committed capacity of approximately 240 megawatts and total delivered or on-order generation capacity of approximately 550 megawatts,…
• RES (RPC, INC.)
• FY2025 10-K: ​ Other (both segments) ​ $ 109,285 ​ 6.8 % ​ $ 111,842 ​ 7.9 % ​ $ 141,187 ​ 8.7 % ​ Technical Services Segment Pressure Pumping : 29.8% of 2025 total revenues. Services are provided to customers throughout Texas and the mid-continent regions of the United States, with a concentration in the Permian basin. We…
• FY2025 10-K: …or eliminate the demand for our pressure pumping services. RPC's pressure pumping services are the subject of continuing federal, state and local regulatory oversight. This scrutiny is prompted in part by public concern regarding the potential impact on drinking and ground water and other environmental issues arising…
• NESR (NATIONAL ENERGY SERVICES REUNITED CORP.)
• FY2025 10-K: …are set forth below (in US$ thousands): SCHEDULE OF INTANGIBLE ASSETS SUBJECT TO AMORTIZATION December 31, 2025 December 31, 2024 Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Customer contracts & relationships $ 153,500 $ (…
• FY2025 10-K: Revenues We earn revenue from our broad suite of oilfield services, including coiled tubing, hydraulic fracturing, cementing, stimulation and pumping, well testing services, drilling services and rental, fishing and remediation, drilling and workover rigs, nitrogen services, wireline logging services, turbines…

Well Construction (reported)

• BKR (Baker Hughes Co)
• FY2025 10-K: …and technology portfolio to focus on new energy areas, such as geothermal and CCUS; strengthening its digital architecture; and addressing key energy market themes. The OFSE segment is organized into four product lines. • Well Construction focuses on drilling and includes drilling services (directional drilling,…
• FY2025 10-K: 5, the Company expects to recognize revenue of approximately 59 %, 74 %, and 89 % of the total remaining performance obligations within 2 , 5 , and 15 years, respectively, and the remaining thereafter. Contract modifications could affect both the timing to complete as well as the amount to be received as the Company…
• HAL (HALLIBURTON COMPANY)
• FY2025 10-K: , questions arise about the scope of our operations in the shale natural gas and shale oil sectors, and the extent to which these operations may affect human health and the environment. At the direction of our customer, we design and generally implement a hydraulic fracturing operation to stimulate the well ' s…
• FY2025 10-K: …in turn create demand for our products and services. We continue to monitor the recent developments in Venezuela and plan to grow our business once commercial and legal terms are resolved, including payment certainty. HAL 2025 FORM 10-K | 29 Table of Contents Item 7 | Results of Operations in 2025 Compared to 2024…
• NOV (NOV INC.)
• FY2025 10-K: …we believe are reasonable. The combination of these factors forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results are likely to differ from our current estimates and those differences may be material. Revenue…
• FY2025 10-K: …of oilfield drilling activity by oil and gas companies, drilling contractors, and oilfield service companies. Demand for the segment's composite solutions serving applications outside of oil and gas are driven by industrial activity, infrastructure spend, and population growth. Energy Equipment The Company's Energy…
• RES (RPC, INC.)
• FY2025 10-K: …flows in an existing formation, or to address well control issues. This operating segment consists primarily of pressure pumping, wireline, downhole tools, coiled tubing and cementing. Customers include major multi-national and independent oil and gas producers and selected nationally owned oil companies. The…
• FY2025 10-K: ​ Other (both segments) ​ $ 109,285 ​ 6.8 % ​ $ 111,842 ​ 7.9 % ​ $ 141,187 ​ 8.7 % ​ Technical Services Segment Pressure Pumping : 29.8% of 2025 total revenues. Services are provided to customers throughout Texas and the mid-continent regions of the United States, with a concentration in the Permian basin. We…
• WFRD (Weatherford International plc)
• FY2025 10-K: …develop and produce from their oil and natural gas reservoirs more efficiently. Our products and services are designed to enable our customers to increase production rates while reducing their costs of drilling and production. Reportable Segments We offer our services and technologies in relation to the well life…
• FY2025 10-K: …analyze customer requirements and provide software enabled design input from pre-job planning to installation. Completions offer customers a comprehensive portfolio of completion tools, such as safety valves, production packers, downhole reservoir monitoring, flow control, isolation packers, multistage fracturing…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.