Trade of the Day: Schlumberger Limited. (SLB) Pushing Forward

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Schlumberger Limited. (NYSE:SLB) — This leading oilfield equipment service company provides its expertise to the global oil and gas industry. On Oct. 21, Standard & Poor’s kept a four-star buy on SLB and raised their 2016 EPS by a penny to $1.14 and their earnings estimate for 2017 to $1.97, up 10 cents.

Their 12-month target remains at $88, but it could be raised as a result of the OPEC agreement reached yesterday. SLB’s third-quarter EPS of 25 cents beat the Capital IQ consensus by 3 cents. Further management stated that it expects a recovery in both the Middle East and Russia markets in 2017 — again this opinion was published prior to OPEC’s recent pact.

Additionally, S&P’s opinion noted in a recent report that Schlumberger has been successful in reducing the negative impact on margins from recent acquisitions. One of those acquisitions was completed in April in a cash and stock deal for Cameron International, a “natural extension of SLB’s OneSubSea joint venture.”

S&P’s target price for SLB is $88, which is modest in light of recent developments. The stock pays a dividend of $2 per share, providing a dividend yield of 2.4%.

Technically, SLB is challenging a triple top at $84 following yesterday’s high-volume advance of over $4. The jump opened a continuation gap from $80.29 to $82.05. The nature of this gap is fragile and will probably be closed by half. However, SLB confirmed its bull market status with support at a line drawn from the April low through the September low.

It also has tracked the support of its 200-day moving average.

MACD confirmed its bullish status and momentum (not shown) is very positive. Thus, I would prefer to buy SLB on a partial retracement of the open gap by placing an open order to buy Schlumberger at $81 with a trading target of $95 for a proposed gain of 17%.

SLB Buy $81 T$95
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Trade of the Day: Schlumberger Limited. (SLB) Pushing Forward


Article printed from InvestorPlace Media, https://investorplace.com/2016/12/trade-schlumberger-limited-slb-stock/.

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