Pelotas Sul Phase 2 puts SLB’s exploration tech back in focus
SLB (SLB) is back in the exploration spotlight after partner TGS announced the Pelotas Sul Phase 2 multi client 3D seismic survey offshore southern Brazil, extending coverage across roughly 11,200 square kilometers.
The project follows Phase 1 earlier this year and targets a frontier basin that industry participants link to geological analogs and discoveries offshore Namibia. It features a mix of held and open acreage aimed at both current operators and potential new entrants.
Recent trading shows mixed momentum for SLB, with the share price return rising 2.44% over the past week but slipping 4.93% across the last month. A 23.26% year to date share price return and 40.96% one year total shareholder return point to stronger performance over a longer stretch as investors weigh tomorrow’s earnings update and the Brazil seismic survey news together.
Scan beyond SLB and this Brazil survey by reviewing the hand picked 42 power grid technology and infrastructure stocks that could benefit as energy infrastructure spending and offshore activity evolve.
SLB trades about 20% below the average analyst target and at an even steeper modeled intrinsic discount after a choppy few months. Is that market caution about the cycle, or is it a mispriced earnings story?
Most Popular Narrative: 21% Undervalued
SLB closed at $49.55 against a widely followed fair value estimate of $62.41. This frames the Pelotas Sul news within a broader rerating story that emphasizes digital, production-focused and data center exposure rather than exploration alone.
Rapid scaling of SLB’s Data Center Solutions business, backed by a backlog that underpins an annualized revenue run rate exceeding US$2 billion by the end of 2027 and medium term targets of US$4.5 billion to US$5.0 billion of data center revenue and US$700 million to US$800 million of adjusted EBITDA in 2028 after the Kelvion acquisition, introduces a large, capital light revenue stream that can add meaningfully to consolidated revenue, EBITDA and cash generation.
See why 164 investors see SLB as 21% undervalued.
Result: Fair Value of $62.41 (UNDERVALUED)
Still, the SLB story can change quickly if Middle East activity stays constrained or if the data center and Kelvion integration targets fail to materialize as planned.
Find out about the key risks to this SLB narrative.
Another View: What SLB’s P/E Is Really Saying
The fair value narrative paints SLB as 41.3% undervalued, yet the P/E ratio tells a tighter story. At 23.7x earnings, SLB trades richer than the US Energy Services sector on 21.2x and above its own fair ratio of 22.5x. That premium narrows the margin for error if earnings or cash flows disappoint from here.
Investors weighing these mixed valuation signals may want to stress test their assumptions about growth, margins and capital returns before leaning on any single model, especially when analyst targets and P/E comparisons are pulling in different directions. See what the numbers say about this price — find out in our valuation breakdown.
NYSE:SLB P/E Ratio as at Oct 2026
Next Steps
Mixed signals on SLB so far, right? If you want to move fast and rely on your own judgment, start by weighing the 3 key rewards and 2 important warning signs.
Looking for more investment ideas beyond SLB?
Do not stop at SLB. The next move in your portfolio might come from a very different corner of the market, and you want those options on your radar.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include SLB.
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Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
