SLB N.V. (NYSE:SLB)

An analysis of the valuation ratios reveals a distinct cyclical pattern characterized by a prolonged contraction in multiples from 2022 through early 2025, followed by a sharp recovery in valuation beginning in mid-2025.

Price to Earnings (P/E) Ratio

The P/E ratio exhibited a consistent downward trend from a peak of 26.99 in March 2022, reaching a cyclical low of 11.21 by March 2025. Following this trough, a significant expansion occurred, with the ratio ascending to 25.62 by September 2026, effectively returning to levels observed at the start of the period.

Price to Operating Profit (P/OP) Ratio

Mirroring the P/E trend, the P/OP ratio declined from 18.99 in March 2022 to a minimum of 8.46 in March 2025. The subsequent recovery phase saw the ratio climb back to 18.98 by September 2026, indicating a restoration of the market's valuation relative to operating profitability.

Price to Sales (P/S) Ratio

The P/S ratio reached a peak in December 2022 at 2.84 before entering a steady decline that bottomed at 1.30 in March 2025. A reversal followed, with the ratio increasing to 2.15 by September 2026, suggesting a recovery in the price paid per unit of revenue.

Price to Book Value (P/BV) Ratio

The P/BV ratio peaked at 4.52 in December 2022 and experienced a downward trajectory to a low of 2.03 in September 2025. By September 2026, the ratio had recovered to 3.05, reflecting a renewed market premium over the company's accounting book value.

The high degree of correlation between these four metrics suggests a systemic shift in investor sentiment or market conditions rather than isolated financial changes. The period between late 2022 and early 2025 was characterized by significant multiple compression, while the period from mid-2025 through late 2026 demonstrates a strong and synchronized valuation expansion across all measured categories.

The valuation profile from March 2022 through September 2026 indicates a cyclical transition from a period of valuation contraction to one of significant multiple expansion.

Earnings Per Share (EPS) Performance

A sustained growth phase is observed from March 2022 to December 2024, during which EPS increased from $1.48 to a peak of $3.18. This growth trend reversed in the first quarter of 2025, leading to a gradual decline to $2.10 by September 2026.

Share Price Movement

Share prices exhibited notable volatility, with an early peak of $56.25 in December 2022 followed by a multi-quarter decline to a trough of $34.52 in March 2025. A subsequent recovery phase saw the price return to a range between $48.96 and $55.70 between March and September 2026.

Price-to-Earnings (P/E) Ratio Analysis

The P/E ratio underwent a marked contraction between March 2022 and March 2025, falling from 26.99 to a low of 11.21. During this interval, the valuation multiple decreased even as earnings per share improved, signaling a reduction in the market premium attributed to the stock. From June 2025 onward, a sharp expansion is observed, with the ratio rising to 25.62 by September 2026. This final phase is characterized by a divergence where the valuation multiple increased despite a simultaneous decline in underlying earnings per share, indicating that the price recovery was the primary driver of the ratio's increase.

The Price to Operating Profit (P/OP) ratio exhibits a cyclical pattern characterized by a prolonged period of valuation compression followed by a sharp expansion. The ratio began at 18.99 in March 2022, declined to a trough of 8.46 by March 2025, and subsequently recovered to 18.98 by September 2026.

Operating Profit Trends

Operating profit per share demonstrated consistent growth for over two years, rising from 2.10 in March 2022 to a peak of 4.16 in September 2024. This upward trajectory suggests a period of strong operational performance and efficiency gains. However, a reversal occurred starting in December 2024, with profit per share declining steadily to 2.80 by June 2026, before stabilizing at 2.83 in September 2026.

Share Price Dynamics

The share price moved independently of operating profit for significant durations. After reaching a peak of 56.25 in December 2022, the price entered a general downward trend, reaching its lowest point of 34.52 in March 2025. This decline persisted even as operating profits reached their historical highs, indicating a decoupling of market valuation from immediate operational earnings. A recovery phase began in mid-2025, with the price climbing back to 53.75 by September 2026.

P/OP Ratio Correlation and Valuation Shift

A significant valuation compression is observed between December 2022 and March 2025. During this window, the P/OP ratio fell from 19.24 to 8.46, driven by a combination of falling share prices and rising operating profits. This suggests the market was assigning a lower multiple to each dollar of operating profit during this period. Conversely, from March 2025 to September 2026, a valuation expansion occurred. The P/OP ratio rose back to 18.98, primarily driven by a recovering share price despite a simultaneous decline in operating profit per share, indicating a shift in investor sentiment or an anticipation of future growth not reflected in current operating results.

The analysis of valuation metrics from March 2022 through September 2026 reveals a cyclical pattern in the Price-to-Sales (P/S) ratio, characterized by an initial peak, a prolonged contraction, and a subsequent recovery phase.

Price-to-Sales (P/S) Ratio Trajectory

The P/S ratio began at 2.39 in March 2022 and reached a peak of 2.84 by December 2022. Following this peak, the ratio entered a sustained downward trend, reaching its lowest point of 1.30 in March 2025. A recovery phase ensued throughout the remainder of 2025 and 2026, with the ratio returning to levels between 2.00 and 2.32.

Sales per Share Growth

Sales per share exhibited a consistent upward trend for the majority of the period, rising from 16.74 in March 2022 to a peak of 26.52 in March 2025. Despite a temporary decline in the third quarter of 2025 to 23.59, the metric recovered to 24.99 by September 2026, indicating an overall expansion in revenue generation per share over the long term.

Correlation Between Share Price and Revenue Valuation

A significant divergence is observed between early 2022 and early 2025, where the P/S ratio declined despite a steady increase in sales per share. This indicates that the market's valuation of revenue contracted even as operational sales performance improved. Conversely, the sharp increase in the P/S ratio from 1.34 in June 2025 to 2.32 in March 2026 was primarily driven by a recovery in the share price, which rose from 35.24 to 55.70 during that interval, while sales per share remained relatively stable.

The Price-to-Book Value (P/BV) ratio exhibits significant volatility over the observed period, characterized by an initial peak in valuation, a prolonged period of multiple compression, and a subsequent partial recovery toward the end of the sequence.

Book Value per Share (BVPS) Trend

A consistent long-term upward trajectory in book value per share is observed, rising from 10.86 US$ in March 2022 to 17.65 US$ by September 2026. Despite a brief decline between December 2024 and March 2025, the overall trend indicates a strengthening of the underlying equity base over the five-year span.

Price-to-Book Value (P/BV) Fluctuations

The valuation multiple peaked in December 2022 at 4.52, driven by a surge in the share price to 56.25 US$. Following this peak, the P/BV ratio entered a general downward trend, reaching its lowest point of 2.03 in September 2025. This compression reflects a period where the market price declined more rapidly than the growth of the book value.

Correlation Between Share Price and Valuation Multiple

The P/BV ratio demonstrates a strong correlation with share price movements. The contraction of the multiple from 4.40 in June 2023 to 2.35 in June 2025 corresponds directly with the decline in share price from 57.67 US$ to 35.24 US$. Conversely, the recovery of the P/BV ratio to 3.05 by September 2026 is aligned with the share price rebounding to 53.75 US$.

Valuation Recovery Phase

A reversal in the downward valuation trend began in December 2025, where the P/BV ratio rose from 2.03 in September 2025 to 2.81. This recovery continued through 2026, indicating an increase in market confidence or an adjustment in the perceived value of the company's assets relative to its book value.