Schlumberger Embraces Digital Transformation and Boosts Oil Recovery Methods
Schlumberger's Mixed Outlook Amid Energy Sector Shifts and Market Volatility
Schlumberger (SLB), a leading player in the energy technology sector, is currently facing a mixed outlook as it navigates through the evolving "Energy & Power" landscape, marked by the increasing influence of AI technologies, often referred to as the "Power Revolution"[1][2].
Melius Research recently initiated coverage of Schlumberger with a Buy rating and a price target of $82, acknowledging the company's strategic positioning across Digital and Integration, Reservoir Performance, Well Construction, and Production Systems[1]. The recent acquisition of ChampionX, integrated into the Production Systems segment, is expected to enhance Schlumberger’s surface and production technologies[2].
However, the short-term market activity shows signs of caution. Trading volumes have dropped about 50%, despite modest price gains, signaling reduced investor enthusiasm or liquidity[3]. Technical analysis reveals a predominantly bearish sentiment, with bullish signals few and far between[5], suggesting some investors may be hesitant about immediate upside.
Schlumberger's stock currently trades at 6.25x EV/aEBITDA, a relative discount to its historical premium range[6]. This could indicate potential for recovery or revaluation if market conditions improve.
In Q2'25, Schlumberger's top line declined by 6%, primarily due to a -13% decline in the Well Construction segment. The Production Systems segment, however, remained relatively flat, with an 80bps margin expansion[4]. The company also completed the Palliser asset sale in Canada, bringing in $316mm in net cash proceeds[5].
The acquisition of ChampionX, finalized on July 16, 2025, over a year after the initial announcement, is strategically aimed at expanding Schlumberger’s footprint in the digital and chemical solutions for oil production, which may provide some insulation from pure oil price dependency[7].
Schlumberger's Digital & Integration segment was impacted by lower exploration data in Q2'25, despite double-digit sequential growth in sales for its platforms, applications, and digital operations[4]. Compared to peer Oilfield Services (OFS) companies, SLB shares trade at a moderate discount on an unadjusted basis, particularly when compared to US-peer Baker Hughes (BKR)[8].
Tactically, SLB shares may remain in a bearish trend in the near term until improvements to operations are realized for H2'25. This outlook is influenced by ongoing oil market volatility and broader macroeconomic uncertainties. The International Energy Agency (IEA) recently cut its demand growth forecasts for the second half of 2025 and 2026, while OPEC+ raised its oil-demand forecast for 2026, expecting global demand to grow by 1.38MMbbl/d[9][10].
The EU's potential purchase of $750b in US energy as part of its expansive trade deal could benefit Schlumberger over time as demand for US production increases internationally[11].
In conclusion, investors should weigh these factors and consider Schlumberger as a moderately promising energy services stock with growth potential tied closely to oil market recovery and successful integration of its recent acquisition. The company's diversified segments and strategic acquisitions position it well for growth, especially in the context of the AI-driven "Power Revolution"[1][2]. However, the near-term outlook remains cautious due to ongoing oil market volatility and broader macroeconomic uncertainties.
[1] Melius Research, "Schlumberger: A Buy in the Energy & Power Revolution," link
[2] Schlumberger, "Schlumberger Completes Acquisition of ChampionX," link
[3] Yahoo Finance, "SLB Trading Volume," link
[4] Schlumberger, "Schlumberger Reports Second-Quarter 2025 Results," link
[5] CNBC, "Technical Analysis: Schlumberger (SLB)," link
[6] Bloomberg, "Schlumberger Valuation," link
[7] Schlumberger, "Schlumberger Announces Agreement to Acquire ChampionX," link
[8] S&P Global Market Intelligence, "Schlumberger vs. Peer Oilfield Services Companies," link
[9] International Energy Agency, "IEA Cuts Global Demand Growth Forecasts," link
[10] OPEC, "OPEC+ Raises Oil-Demand Forecast for 2026," link
[11] Reuters, "EU to Buy $750 Billion in U.S. LNG as Part of Trade Deal," link
- Investors should consider Schlumberger as a moderately promising energy services stock, given its strategic positioning in the digital and chemical solutions for oil production, and its growth potential tied closely to oil market recovery and successful integration of recent acquisition.
- The recent acquisition of ChampionX by Schlumberger, finalized in July 2025, is strategically aimed at expanding the company's footprint in the digital and chemical solutions for oil production, which may provide some insulation from pure oil price dependency.
- The mixed outlook for Schlumberger is influenced by ongoing oil market volatility, broader macroeconomic uncertainties, and the short-term market activity showing signs of reduction in investor enthusiasm or liquidity.
