Both Bloomberg and The Wall Street Journal recently published bullish articles on Schlumberger (SLB) and Baker Hughes (BHGE), as oil E&P companies are moving forward with large projects around the globe, notes Crista Huff, editor of Cabot Undervalued Stocks Advisor.
Baker Hughes, a GE Company offers products, services and digital solutions to the international oil and gas community. The company reported second quarter adjusted EPS of $0.13, missing the consensus estimate by a penny.
Revenue of $5.55 billion came in a fraction below the consensus estimate of $5.57 billion. Analysts were pleased with the buoyant tone coming from Baker Hughes’ management regarding expected international revenue growth in the second half of 2018.
BHGE is an aggressive growth stock, undervalued based on 2019 numbers. We’ll have updated earnings estimates next week. The stock fell dramatically when the 2018 stock market correction arrived, completely recovered by May, and is now trading between $32 and $37. We rate the stock as a strong buy.
Schlumberger is the world’s largest oilfield service company. The firm reported second quarter EPS of $0.43 on July 20, on target with consensus estimates. Revenue of $8.3 billion slightly missed the estimate of $8.36 billion.
The market was pleased with bullish statements regarding second half 2018 and 2019 revenue increases. The number of U.S. rigs drilling for crude oil and natural gas fell by eight last week to a total of 1,046, up 96 vs. a year ago.
Schlumberger is an aggressive growth stock, undervalued based on 2019 numbers. The stock — yielding 3% — is low within its 2018 trading range. There’s short-term price resistance at $74. We rate the stock as a strong buy.
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