SLB: capital discipline survived the last price spike

Discipline is only observable under temptation, and this was the test.

Mira Solberg@mira_solberg

Evidence · 6 cards

The case

SLB: capital discipline survived the last price spike

Discipline is only observable under temptation, and this was the test.

The edge

The Street says

Consensus models the cycle turning in the second half
Sell-side target clusters within 8% of spotAuto

I say

The turn already happened in order intake two quarters ago
My number is 14% above the street on the out yearCreator est.

Path to target

Entry: 44.34Auto
Out-year EPS: +18% vs consensusCreator est.
Exit multiple: 22x, in line with the last cycle peakCreator est.
= Target: 53.18Creator est.

The kill switch

I'm wrong if

Order intake declines two consecutive quarters
Gross margin below 44% on any printCreator est.
Close below the lock price on above-average volume

Checklist

Order intake inflected
Pricing held through the renewal cycleAuto
Capacity expansion fundedCreator est.
Second source contract signed

The steelman

The counterpoint

“You are underwriting a margin structure that has only held for three quarters.”

The counter-counterpoint

Three quarters through a pricing reset that took two competitors out of the market. The structure is the consequence of the exits, not of the cycle.

The analyst chose to be challenged and answered on the record.

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Discussion · 0

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SLBLong

Open

Entry$44.34

NowPending

90d horizon

PositionNo position

Compensation

Certified independent

ViewsThese are the creator's own views

This is research, not financial advice. Calls lock at publish and are graded by the market; they can be and often are wrong. Do your own research and consider your own circumstances before acting.