Weatherford International is Wednesday's IBD Stock Of The Day, with the oil field services stalwart offering aggressive investors early entries. WFRD stock gained ground Wednesday.
U.S. crude oil prices jumped around 2% Wednesday, hitting a two-week high above $75 per barrel amid tensions in the Red Sea where Houthi militants are attempting to disrupt global trade and the U.S. has launched a task force to protect the trade route.
Weatherford International is incorporated in Ireland with its primary offices in Houston. The company entered Chapter 11 bankruptcy protection in July 2019. It emerged from bankruptcy five months later, and relisted on the Nasdaq in June 2021.
The company provides equipment and services for drilling, evaluation, well construction, completion and production in the oil and natural gas industry. Weatherford reports it has operations in more than 70 countries.
In early December, WFRD announced it has been awarded a five-year contract with Petroleo Brasileiro to provide deep-water offshore services.
Wall Street sees Weatherford's sales increasing 10% to $1.33 billion in Q4 with EPS growing 25% to $1.40. Meanwhile, analysts predict full-year earnings will balloon 500% to $5.17 per share with revenue growing 18% to $5.11 billion.
Weatherford International in October forecast full-year adjusted EBITDA margins, earnings before interest, taxes, depreciation and amortization, will expand over 400 basis points year over year, with more than $450 million in adjusted free cash flow. It previously predicted EBITDA margin expansion of more than 350 basis points year over year with adjusted free cash flow exceeding $400 million in 2023.
WFRD Stock
Weatherford International shares gained o.3% to 96.01 in Wednesday's market action, extending Tuesday's strong move above its 50-day moving average. Wednesday's modest gain pushed shares above a downward-sloping trendline. Both offer early entries into Weatherford stock.
WFRD stock has formed a cup base with an official 100.93 buy point, according to MarketSmith.
Weatherford stock has gained more than 6% in December and 89% since the start of the year, handily outperforming the S&P 500 index.
Weatherford, like most oil stocks, is strongly influenced by energy prices. But while crude prices began retreating in late September, Weatherford stock resisted the slide, hitting a record 110.93 on Nov. 3. Shares then retreated 17% to 83.55 by Dec. 12 — just undercutting an early October low — before rebounding as crude prices revived.
The relative strength line retreated significantly during Weatherford's slide as the S&P 500 surged higher, but much less than the RS lines of other energy stocks during this span. That includes oil services giants such as SLB and Halliburton.
Strong Growth Hailed
In November, Bank of America initiated coverage of WFRD stock with a buy rating and 120 price target. The firm wrote that the company has staged a "remarkable turnaround" from its Chapter 11 restructuring in 2019 and is generating strong adjusted EBITDA margin.
Bank of America saw share price upside from continued revenue and margin expansion, led by international markets.
Weatherford International reported better-than-expected third-quarter earnings and revenue while also raising its full-year outlook in late October. The company saw third-quarter revenue increase 17% to $1.31 billion, topping analyst expectations of $1.28 billion. Weatherford's quarterly earnings ballooned more than 300% to $1.66 per share.
WFRD management added quarterly sales were driven by international revenue growing 27%, with a bump in activity in Saudi Arabia.
Weatherford stock has a 97 Composite Rating. WFRD shares also have a 95 Relative Strength Rating and an 82 EPS Rating.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
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