Oilfield Services Titan, IBD Stock Of The Day, Forges New Base After EPS Soar 300%

Weatherford International (WFRD) is Friday’s IBD Stock Of The Day, as the oil field services stalwart works to form a base. The company this week reported better-than-expected third-quarter earnings and revenue and raised its full-year outlook. WFRD shares edged lower Friday during market trade.

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Late on Tuesday, the company reported third-quarter revenue increased 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, according to FactSet.

Management added that the quarterly sales increase was driven by international revenue growing 27%, with a bump in activity in Saudi Arabia.

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.

The company on Tuesday also raised its 2023 outlook with expectations that revenues will continue to grow in the fourth quarter. Weatherford also forecasts 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.

Wall Street sees Weatherford’s sales increasing 10% to $1.33 billion in Q4 with EPS growing 25% to $1.40.

Weatherford Stock

WFRD shares edged down 0.9% to 92.39 Friday during market action in lower-than-average volume. However, Weatherford stock has gained more than 2% in October and 81% since the start of the year, handily outperforming the S&P 500 index.

Weatherford stock is consolidating, almost six weeks into a pattern that is a fraction over 15% deep — close enough to call a flat base. Barring a late-day surge, investors could also read the pattern as a valid six-week cup base with a 98.97 buy point at the end of the day on Friday.

In either case, WFRD shares have been trading tight, with daily lows testing support at their 50-day moving average. The Oct. 25 high of 96.47 is an early entry but the market remains in a correction, which means it is a bad time to make new stock purchases.

On Thursday, Piper Sandler analyst Luke Lemoine raised his WFRD price target to 135, up from 116, and maintained an overweight rating on the shares. The analyst sees Weatherford earnings continuing higher as the company moves toward mid-20% EBITDA margins.

Weatherford stock has a best-possible 99 Composite Rating. WFRD shares have a 98 Relative Strength Rating and an 83 EPS Rating.

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