Buy Rating on Weatherford International: Surpassing Expectations with Robust Q1 Performance and Promising Financial Outlook

Goldman Sachs analyst Atidrip Modak has maintained their bullish stance on WFRD stock, giving a Buy rating on April 15.

Atidrip Modak’s rating is based on the robust performance of Weatherford International in the first quarter of 2024, which notably surpassed Goldman Sachs’ expectations in terms of adjusted EBITDA and overall margins. The company reported a 5% higher EBITDA than estimated, and their EBITDA margin exceeded both Goldman Sachs and consensus estimates. This outperformance was attributed to significantly better margins in the Drilling and Evaluation sector, despite slight underperformance in Well Construction and Completions and Production & Intervention segments. Notably, the company’s revenue growth was led by their Drilling and Evaluation operations, which somewhat counterbalanced weaker results from Production & Intervention.

Additionally, Modak has been encouraged by Weatherford International’s revised guidance, which anticipates achieving a 25% margin in 2024, a year earlier than initially forecasted. This optimistic outlook, coupled with the company’s strategic financial decisions, such as expanding their revolving credit facility and redeeming senior secured notes, signals strong financial health and management’s confidence in continued growth. The company’s proactive approach to capital return strategy, including the consideration of share repurchases and dividends, also supports the potential for shareholder value enhancement. These factors collectively underpin Modak’s Buy rating for Weatherford International’s stock.

In another report released on April 15, Bank of America Securities also maintained a Buy rating on the stock with a $135.00 price target.

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Weatherford International (WFRD) Company Description:

Weatherford International Plc provides equipment and services to the oil and natural gas exploration and production industry. It operates through two segments: Western Hemisphere and Eastern Hemispher. The company products and services are Drilling and Evaluation, Production, Completions, and Well Construction. Weatherford International was founded in 1941 and is headquartered in Baar, Switzerland.