SLB N.V.

• Valuation4.5 / 10
• Management8.5 / 10
• Balance Sheet6 / 10
• Profitability5 / 10
• Revenue Growth4.5 / 10
• Risk Assessment7.5 / 10
• Competitive Moat7.5 / 10
• Earnings Quality6 / 10
• Capital Efficiency6.5 / 10

Operating economics demonstrate narrow-moat durability, with FY2025 operating income of $5,456M representing a 15.3% operating margin, and an EBIT margin of 14.66%, outperforming peer Baker Hughes' 12.83% operating margin. Production Systems and Well Construction anchor divisional scale at $13,325M and $11,856M respectively,. Near-term margin expansion faces headwind from competitive tender pricing concessions and the initial dilutive margin mix from rapidly scaling Data Center Solutions. However, Data Center Solutions delivers capital-light top-line diversification, targeting an annualized run rate exceeding $2.0B exiting 2027 supported by modular manufacturing across 20 to 30 data centers.^3,4,5,7,8

Our synthesized intrinsic valuation midpoint of $47.18 is anchored by a primary enterprise DCF model ($44.32 midpoint at computed WACC of 8.22%) and supported by multi-stage moat fade ($56.08) and forward earnings ($40.98). Our fair value sits 17.9% below the present-value equivalent analyst consensus 12-month target of $57.44 (discounted from an undiscounted 12-month consensus reference of $62.52 at an equity cost of 8.85%). This divergence is justified because consensus overlooks near-term rig mobilization lead times in the Middle East, where Q4 regional revenue is guided at $2.1B-$2.2B ($8.4B-$8.8B annualized vs $12,218M in FY2025), while capital expenditures step up to $2.5B in 2026.^2,5,8

Capital allocation remains disciplined, underwritten by FY2025 operating cash flow of $6,489M and free cash flow of $4,795M. Management guidance targets returning more than $4.0B to shareholders in 2026, led by a minimum of $2.4B in share repurchases that offsets share-based compensation dilution ($332M in FY2025) and reduces shares outstanding from 1,484M. While cash generation and shareholder yield provide downside protection, the stock's 3.3% premium to fair value at 15.95x forward P/E fully reflects current cyclical visibility, supporting our Hold rating.^4,5,6,7

Intense tendering price competition and margin dilution from scaling Data Center Solutions,.

現在:14.66% (FY2025 EBIT) / 15.3% (operating margin)

In the Bull scenario, Middle East production restoration accelerates beyond baseline projections and deepwater campaigns in Latin America and West Africa expand offshore revenue growth above 10%. Rapid conversion of $9.0B in subsea bookings combines with Data Center Solutions surpassing its $2.0B run rate target ahead of schedule. Operating margins expand through ChampionX synergies and digital mix, and robust free cash flow conversion underwrites share buybacks exceeding guided baselines, supporting earnings expansion toward the top of consensus expectations.⁵

Forecast cash flows / share

$11.06

Terminal value / share

$38.72

Signed net debt / current share

$5.45