Schlumberger (SLB) "meaningfully reset expectations" in Q3, but the stock still has "modest incremental downside risk," Morgan Stanley said Friday in a note.

The investment firm also said it continues to see "substantial value" in the oilfield services provider's non-core businesses as well as in its OneSubsea joint venture, which could potentially offset any downside in the company's core upstream businesses.

Morgan Stanley endorsed Schlumberger as one of its top stock plays over the next 12 to 18 months.

The firm said Schlumberger's Russia operations are currently in the spotlight following the announcement of fresh and more stringent US sanctions on Russia.

Morgan Stanley referred to various media reports which said there's "mounting pressure on the company to pull out of Russia entirely," adding that "there's potential that the dynamics here change again under the Trump administration."

Morgan Stanley lowered its price target to $50 from $55 while maintaining an overweight rating on the stock, ahead of the company's Q4 results, which came out earlier Friday.

Shares of Schlumberger were up nearly 8% in recent trading.

Price: 44.31, Change: +3.22, Percent Change: +7.82