SLB: Valuation up to $60 From $56 on Strong Offshore Activity and Digital Solutions Demand

After incorporating SLB’s full financial and operating results for fiscal 2023, we’re raising our fair value estimate to $60 from $56, mainly due to our improved outlook for profitable revenue growth over the next five years. Several factors drive our forecast, most notably SLB’s expanded offshore exposure and the continued widespread adoption of its digital and integration solutions. We estimate annual top-line growth will average more than 8% over the next five years, with steady adjusted EBITDA expansion, exiting 2028 with a 26% margin. We maintain our narrow moat rating and at the time of writing, shares trade at a roughly 10% discount to our fair value estimate.