Crude futures (CLG24) may have rallied on Friday, bolstered by positive economic data - but the most active contract is still down 13.8% from its October highs. This trend in the futures market is significant for energy stocks, which are closely tied to crude oil prices. Many oil majors, including Exxon Mobil (XOM) and Chevron (CVX), are also negative over the last three months.
On the other hand, Weatherford International (WFRD) has been a standout in terms of price action. With a market cap of $6.67 billion, WFRD is up 11% over the last three months, and the shares have rallied more than 90% over the past year. And with analysts expecting more upside in the year ahead, the firm offers a strong investment thesis for 2024. Here's a closer look at what's in store.
Weatherford International Exceeds Q3 Earnings Expectations
Houston-based Weatherford International, a major player in oilfield services, was formed in 1941. The firm offers comprehensive services and equipment for oil, geothermal, and natural gas well exploration and production worldwide. Its offerings include artificial lift systems, pressure pumping, and reservoir stimulation. Its business has three divisions: drilling and evaluation; well construction and completion; and production and intervention.
Weatherford reported $1.31 billion in sales for the third quarter of 2023, a 17.23% increase year over year. Net income increased by 339.29% to $123 million, and earnings per share (EPS) arrived at $1.66. The results beat analysts' expectations on both revenue and EPS. Meanwhile, the net profit margin climbed to 9.37%, an increase of 274.8% over the previous year.
Total assets on the company's balance sheet increased by 3.99% to $4.90 billion, while total liabilities fell by 2.43%. Cash from operations grew by 7.5% to $172 million, and free cash flow increased by 8.33% to $169.13 million.
Analysts Project Steady Growth Amid Positive Earnings Trends
Weatherford International looks well-positioned for future expansion, bolstered by newly secured contracts in the Middle East, where it has a rapidly expanding footprint.
Analysts are expecting the company to grow earnings by 31.7% in fiscal 2024, with revenue projected to rise 9.80% on the year.
Weatherford International will release its next earnings report on Feb. 6, and the average earnings estimate for the quarter is $1.48 per share - indicating a year-over-year growth rate of 32.14%.
What Do Analysts Expect For WFRD Stock?
Over the past three months, Weatherford International has consistently maintained a unanimous “Strong Buy” rating, with 7 analysts currently in coverage.
Despite the stock's impressive price gains already, Wall Street expects WFRD to keep climbing. The average 12-month price target is $118.86, implying expected upside of 25.3% over the next year.
Priced at a reasonable 1.24x 2024 revenue, now seems like an opportune time to scoop up shares of Weatherford stock for more gains.
On the date of publication, Faizan Farooque did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
