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SLB

Schlumberger Ltd. – Support Activities for Oil and Gas Operations
Schlumberger is the world's leading provider of technology and digital solutions for reservoir characterization, drilling, production, and processing to the energy industry. With product sales and services in more than 120 countries and employing approximately 82,000 people as of the end of third quarter of 2020 who represent over 170 nationalities, Schlumberger supplies the industry's most comprehensive range of products and services, from exploration through production, and integrated pore-to-pipeline solutions that optimize hydrocarbon recovery to deliver reservoir performance sustainably. Schlumberger Limited has executive offices in Paris, Houston, London, and The Hague, and reported revenues of $32.92 billion in 2019.
Analysis Results
Intrinsic Value $24.22
Latest Price $46.69
Relative Value 93% overvalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of -8.8%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 5.9%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -8.8%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 2.09 1.97
2023 1.91 1.7
2024 1.74 1.46
2025 1.58 1.26
2026 1.44 1.08
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 37.7 billion. This corresponds to a present value of 26.7 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 7.48 billion. Adding in the terminal value gives a total present value of 34.2 billion.

There are presently 1.41 billion outstanding shares, so the intrinsic value per share is 24.22.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 25,308,000,000
Current Cash 6,278,000,000
Current Liabilities 20,718,000,000
Current Debt 1,818,000,000
Non-Cash Working Capital (NCWC) 130,000,000
Change in NCWC -142,000,000
EBIT 5,610,000,000
Tax Provision 892,000,000
Depreciation and Amortization 4,240,000,000
Capital Expenditure -3,308,000,000
Unlevered Free Cash Flow 5,346,057,287
Current Assets 12,919,000,000
Current Cash 3,006,000,000
Current Liabilities 10,491,000,000
Current Debt 850,000,000
Non-Cash Working Capital (NCWC) 272,000,000
Change in NCWC -517,000,000
EBIT 1,747,000,000
Tax Provision -812,000,000
Depreciation and Amortization 2,566,000,000
Capital Expenditure -1,116,000,000
Unlevered Free Cash Flow 2,680,000,000
Current Assets 15,530,000,000
Current Cash 2,167,000,000
Current Liabilities 13,098,000,000
Current Debt 524,000,000
Non-Cash Working Capital (NCWC) 789,000,000
Change in NCWC -86,000,000
EBIT 3,051,000,000
Tax Provision -311,000,000
Depreciation and Amortization 3,589,000,000
Capital Expenditure -2,736,000,000
Unlevered Free Cash Flow 3,818,000,000
Current Assets 15,731,000,000
Current Cash 2,777,000,000
Current Liabilities 13,486,000,000
Current Debt 1,407,000,000
Non-Cash Working Capital (NCWC) 875,000,000
Change in NCWC -575,000,000
EBIT 3,280,000,000
Tax Provision 447,000,000
Depreciation and Amortization 3,556,000,000
Capital Expenditure -3,241,000,000
Unlevered Free Cash Flow 2,461,250,000
Current Assets 18,497,000,000
Current Cash 5,089,000,000
Current Liabilities 15,282,000,000
Current Debt 3,324,000,000
Non-Cash Working Capital (NCWC) 1,450,000,000
Change in NCWC -1,314,000,000
EBIT 2,774,000,000
Tax Provision 330,000,000
Depreciation and Amortization 3,837,000,000
Capital Expenditure -3,992,000,000
Unlevered Free Cash Flow 1,305,000,000
Current Assets 23,927,000,000
Current Cash 9,257,000,000
Current Liabilities 15,059,000,000
Current Debt 3,153,000,000
Non-Cash Working Capital (NCWC) 2,764,000,000
Change in NCWC -1,550,000,000
EBIT 2,375,000,000
Tax Provision -278,000,000
Depreciation and Amortization 4,094,000,000
Capital Expenditure -3,716,000,000
Unlevered Free Cash Flow 1,203,000,000
Current Assets 26,912,000,000
Current Cash 13,034,000,000
Current Liabilities 14,121,000,000
Current Debt 4,557,000,000
Non-Cash Working Capital (NCWC) 4,314,000,000
Change in NCWC -1,468,000,000
EBIT 5,750,000,000
Tax Provision 746,000,000
Depreciation and Amortization 4,078,000,000
Capital Expenditure -3,849,000,000
Unlevered Free Cash Flow 3,022,107,254
Current Assets 24,694,000,000
Current Cash 7,501,000,000
Current Liabilities 14,176,000,000
Current Debt 2,765,000,000
Non-Cash Working Capital (NCWC) 5,782,000,000
Change in NCWC -1,331,000,000
EBIT 9,730,000,000
Tax Provision 1,928,000,000
Depreciation and Amortization 4,094,000,000
Capital Expenditure -5,037,000,000
Unlevered Free Cash Flow 5,000,254,483
Current Assets 26,225,000,000
Current Cash 8,370,000,000
Current Liabilities 13,525,000,000
Current Debt 2,783,000,000
Non-Cash Working Capital (NCWC) 7,113,000,000
Change in NCWC -522,000,000
EBIT 8,477,000,000
Tax Provision 1,848,000,000
Depreciation and Amortization 3,666,000,000
Capital Expenditure -4,337,000,000
Unlevered Free Cash Flow 5,481,503,624
Current Assets 24,156,000,000
Current Cash 6,274,000,000
Current Liabilities 12,368,000,000
Current Debt 2,121,000,000
Non-Cash Working Capital (NCWC) 7,635,000,000
Change in NCWC 1,084,000,000
EBIT 7,662,000,000
Tax Provision 1,723,000,000
Depreciation and Amortization 3,500,000,000
Capital Expenditure -5,046,000,000
Unlevered Free Cash Flow 5,364,146,015

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