Why Schlumberger Stock Is Up By 9% Today

Key Insights

• WTI oil moves towards the $130 level as the U.S. is ready to impose a ban on Russian oil. 
• Energy-related stocks enjoy strong demand amid a global rally in the commodity markets.
• Schlumberger stock remains reasonably priced and has a decent chance to gain additional upside momentum in the upcoming weeks. 

Schlumberger Stock Gains Ground As WTI Oil Gets Close To The $130 Level

Shares of Schlumberger gained strong upside momentum as WTI oil moved above the $129 level after reports indicated that the U.S. would ban imports of Russian oil.

Schlumberger provides services to the energy industry in more than 100 countries. As a service company, Schlumberger stands to benefit in the longer term as countries will have to invest in new production to find alternatives to Russian oil & gas.

Energy-related stocks have been rallying in recent days as Western companies decreased or stopped purchases of Russian energy, causing the prices to spike. This rally continues as investors prepare for a world where oil costs more than $100 per barrel.

What’s Next For Schlumberger Stock?

Analysts expect that Schlumberger will report earnings of $1.8 per share in the current year and $2.36 per share in the next year, so the stock is trading at less than 20 forward P/E. Analyst estimates have been moving higher in recent weeks, and they will surely get updated to account for the recent developments in the oil markets.

Many funds have tried to move away from oil-related stocks due to the upcoming shift to renewable energy, but the recent events highlighted the importance of energy independence and diversification, so stocks like Schlumberger may enjoy stronger support in the upcoming weeks.

I’d also note that oil-related stocks may benefit from the flow of funds into safe-haven assets as investors try to protect themselves from additional downside in the markets. At less than 20 forward P/E, some traders will note that Schlumberger may be a decent alternative to high-PE tech stocks.

For a look at all of today’s economic events, check out our economic calendar.