Schlumberger shares have more room to rise

NEW YORK, May 3 – Shares in oil services company Schlumberger (SLB.N) may rise as much as 25 percent in the next two years if the global economy begins to recover in 2010 or in 2011, according to a report in Barron’s.

The story in the May 4 edition said that in the case of a strong global rebound the stock, which closed at $50.67 on New York Stock Exchange on Friday, could be as much as 50 percent higher four or five years from now.

Even though Schlumberger shares have already risen from their February low of $35, Barron’s argues that its price to earnings ratio of 19 is still well below its median P/E of 23.

If oil demand fully recovers it could get to a P/E of 25, implying a $75 share price, according to the report.