SLB (SLB) could face a weak Q1 from lower Middle East activity, but a good longer-term setup from repair work, higher regional volumes, growth in digital and data center businesses, and continued execution is likely, UBS said in a note Monday.

The company likely faces the biggest hit among peers from the regional conflict because of its exposure to offshore markets and Iraq, with revenue of $8.59 billion and adjusted earnings of $0.49 a share, all below Wall Street forecasts, the investment firm said.

UBS said the drag in the Middle East now looks worse than initially indicated, as weakness has spread to offshore Saudi Arabia and led to more cuts in Iraq activity; however, SLB could benefit later if OPEC producers move to replace lost supply and if repair work and volume recovery lift activity in the region.

SLB's digital business should remain a bright spot in 2026, with Digital Operations expected to lead growth and June's Digital Day seen as a key event.

UBS kept its buy rating and maintained its $61 price target, adding that SLB is building its data center business with a goal of reaching a $1 billion run rate by the end of 2026.

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