Summary

  • The stock price of Weatherford International gained 2.5% after broker BofA initiated coverage on it with a ‘buy’ rating.
  • According to the broker, a strong turnaround in margins is expected for WFRD.
  • EODHD/Others data suggests that WFRD has a mean recommendation rating of 1.7 on five and the consensus mean price target on the stock is US$ 121.

Shares of Weatherford International (NASDAQ: WFRD) rose by 2.5% to reach US$97.09 following Bank of America Global Research's initiation of coverage on the company. The broker gave Weatherford a 'buy' rating and a price target, which is ~26% higher than Friday’s closing price.

Weatherford International offers a variety of oilfield services on a global scale, catering to different types of oilfields. The stock is currently being traded at a discounted valuation, and the broker foresees the value gap closing in the next 12 months.

WFRD Stock Price; Source: EODHD/Others

WFRD closed at US$95.36 on Friday, November 10, 2023, gaining 87% on a YTD basis. Year-to-date, the stock has outperformed its peers due to robust financial performance, as highlighted by Bank of America.

The broker has set the price target at US$120.

BofA expects “a strong turnaround” in margins for WFRD

Bank of America anticipates a significant improvement in the company's margins, achieving the highest free cash flow in the past two decades compared to subpar figures before its bankruptcy restructuring in 2019.

According to the broker, Weatherford International recorded a noteworthy 27% year-on-year increase in international revenue during the first nine months of FY23, surpassing competitors such as Halliburton, Schlumberger, and Baker Hughes.

For Q3 2023, WFRD’s revenue rose to USD 1.3 billion, showing a 3% increase compared to the previous quarter and a 17% increase over the same period last year. This growth was primarily fueled by a 3% sequential increase and a significant 27% year-over-year surge in international revenue.

Its operating income reached USD 218 million in Q3 2023, marking an 8% sequential rise and an impressive 80% increase from the previous year. Net income also saw substantial growth, reaching USD 123 million, a 50% increase sequentially and an impressive 339% increase year-over-year, resulting in a net income margin of 9.4%.

Adjusted EBITDA amounted to USD 305 million, showcasing a 5% sequential increase and a substantial 43% year-over-year growth. The adjusted EBITDA margin stood at 23.2%, highest in over 14 years.

Analysts suggest a ‘strong buy’ or ‘buy’ rating on WFRD

As per EODHD/Others data, a total of seven analysts have covered the stock. Among these analysts, two have given WFRD a ‘strong buy’ rating while five analysts have given it a ‘buy’ rating.

Based on these ratings, the mean recommendation rating on WFRD is 1.7 on five. Here, one indicates a ‘strong buy’ rating while five indicates a ‘strong sell' rating. Meanwhile, the consensus mean price target on WFRD is US$ 121, an upside potential of around 27% on Friday’s closing price.

Brokers Evercore ISI and Piper Sandler retained their ratings of ‘outperform’ and ‘overweight’, respectively on WFRD. Raymond James also kept its ‘strong buy’ rating intact on WFRD.

The stock hit its 52-week high of US$ 100.93 last week on November 6, 2023. Since then, WFRD has corrected itself by around 5.5% as at Friday’s close.