Why SLB Could Be the Smartest Oil Stock to Buy Now
Shares of SLB (NYSE: SLB) stock are down just over 1% after the oil field services company reported its third-quarter earnings report. The stock is down approximately 14% in 2025, which is in sympathy with the price of crude oil.
The company delivered a beat on the top and bottom lines. Revenue of $8.93 billion was just a tick higher than the $8.92 billion expected. On the bottom line, SLB delivered 69 cents in earnings per share (EPS), which was 3.95% higher than the estimates for 66 cents.
Commenting on the results, chief executive officer (CEO) Olivier Le Peuch noted that the results met the company’s expectations. Le Peuch remarked that this revenue growth occurred “despite the backdrop of a fully supplied oil market, an uncertain geopolitical environment and subdued commodity prices.”
Oilfield Services Giant Positioned for Next Upcycle
Despite the immediate reaction to the earnings report, SLB’s results reflect cautious optimism. Considering that SLB stock is trading at an attractive valuation and pays a dividend with an attractive yield of 3.5%, the company could be a quiet winner among energy stocks in the next oil cycle.
Crude prices recently dropped below $60 per barrel, but keep in mind that oil prices are often a lagging indicator. Several structural trends point toward higher demand and stronger pricing power ahead. Between North American infrastructure investment, onshoring, and a potential OPEC+ production increase, SLB may be entering a new growth phase.
North American Energy Demand Could Lift Oil Prices
One reason to believe that higher oil prices are inevitable is the surge in U.S. infrastructure and manufacturing investment. Many companies are taking steps to onshore their industrial supply chains. Plus, the ongoing AI infrastructure buildout creates large-scale infrastructure projects that create baseline demand for energy and refined products.
Over time, this combination could tighten supply and support oil prices. As one of the world’s largest oilfield services providers, SLB stands to benefit directly from renewed exploration and production (E&P) activity in North America. However, this is where the SLB earnings results act as a leading indicator. When oil prices rise to $80 or $90 a barrel, SLB’s revenue and earnings growth will be priced in.
International Growth and OPEC+ Production Are Catalysts
Le Peuch noted that international markets are showing resilience, specifically noting robust growth in several countries across the Middle East and Asia. This is significant because nearly 80% of SLB’s revenue comes from international markets, with longer project cycles and higher margins.
The company believes the OPEC+ nations will gradually increase production quotas, which supports the company’s investments in long-cycle projects such as offshore oilfields, showcasing SLB’s expertise.
Technology and Energy Transition Add a Growth Layer
Beyond conventional oilfield services, SLB has become a leader in digital and transition technologies. The company’s SLB New Energy division focuses on carbon capture, geothermal, and lithium extraction. Analysts believe these segments could contribute meaningfully to revenue in the next 10 years.
SLB’s digital platforms, AI tools, and remote operations technology are improving client efficiency while generating higher-margin recurring revenue. In fact, the completion of the company’s $7.75 billion acquisition of ChampionX added to the company’s earnings. SLB expects the acquisition to add $400 million in annual pretax costs.
Financial Strength and Valuation Support the Bull Case
Since the last energy downturn, SLB has prioritized free cash flow, balance sheet improvement, and capital discipline.
With debt down and profitability rising, the company has room to increase dividends and share buybacks.
Despite its strong fundamentals and improving global outlook, SLB trades below its historical valuation multiples and at a discount to industrial peers. SLB stock is trading 59% below analysts’ consensus price targets. That discrepancy exists despite negative sentiment in SLB stock in the last month.
Analysts forecast modest earnings growth of 5.9% in the next 12 months.
However, if oil prices stabilize in the $80–$90 range, earnings could expand at a double-digit rate through 2026, supporting the stock's upside. The stock trades at a discount multiple of just around 9x forward earnings.
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