Raymond James has adjusted its rating on Weatherford International (WFRD, Financial), moving it from "Strong Buy" to "Outperform." The firm also revised its price target for the company, lowering it to $69 from a previous $73. This adjustment comes as the company faces challenges stemming from its substantial exposure to the Mexican market.
The downturn in Mexico is largely attributed to decreased activity from Pemex, the country's state-owned petroleum company, which has worsened more than anticipated. Analysts at Raymond James note that this decline is a significant factor impacting Weatherford's short-term performance, though they anticipate it may stabilize at current levels.
Broader economic uncertainties are expected to persist until there's clarity on the ongoing tariff situation, which also plays a role in influencing market dynamics for Weatherford. Investors are advised to keep an eye on these developments as they could have further implications for the company's operations and stock performance.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 7 analysts, the average target price for Weatherford International PLC (WFRD, Financial) is $82.14 with a high estimate of $97.00 and a low estimate of $62.00. The average target implies an upside of 96.94% from the current price of $41.71. More detailed estimate data can be found on the Weatherford International PLC (WFRD) Forecast page.
Based on the consensus recommendation from 7 brokerage firms, Weatherford International PLC's (WFRD, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Weatherford International PLC (WFRD, Financial) in one year is $73.47, suggesting a upside of 76.14% from the current price of $41.71. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Weatherford International PLC (WFRD) Summary page.
WFRD Key Business Developments
Release Date: April 23, 2025
- Adjusted Free Cash Flow: $66 million for Q1 2025.
- Adjusted EBITDA Margin: 21.2% for Q1 2025.
- Share Repurchase: Approximately $53 million worth of shares repurchased in Q1 2025.
- Dividend: $0.25 per share for the third consecutive quarter.
- Net Leverage Ratio: 0.5x.
- Liquidity: Approximately $1.3 billion.
- Q2 2025 Revenue Guidance: $1.165 billion to $1.195 billion.
- Q2 2025 Adjusted EBITDA Guidance: $245 million to $265 million.
- 2025 Revenue Guidance: $4.6 billion to $5 billion.
- 2025 Adjusted EBITDA Guidance: $975 million to $1.1 billion.
- CapEx for Q1 2025: $77 million.
- Net Working Capital Efficiency: Improved to 25.2% in Q1 2025 from 26.1% in Q1 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Weatherford International PLC (WFRD, Financial) reported adjusted free cash flow of $66 million for the first quarter, demonstrating strong collections and financial discipline.
- The company achieved adjusted EBITDA margins of 21.2% despite lower revenues, indicating effective cost management.
- Weatherford International PLC (WFRD) has successfully paid three quarterly dividends of $0.25 per share and repurchased approximately $152 million worth of shares over the past three quarters.
- The company reported year-on-year growth in the Middle East and Asia regions, showcasing resilience and stability in these markets.
- Weatherford International PLC (WFRD) continues to win high-impact contracts across key regions, demonstrating the strength of its technology and customer trust.
Negative Points
- Activity levels in key segments and geographies, such as Mexico and North America, have softened, impacting overall performance.
- The company expects a significant decline in Mexico's activity, down around 60% year-on-year, which is worse than previously anticipated.
- North America revenues are expected to decline high single to mid-double digits year-on-year, reflecting a challenging market environment.
- Recent US tariffs and retaliatory tariffs have added significant uncertainty to the market, potentially causing demand destruction in the short to mid-term.
- Weatherford International PLC (WFRD) has reduced its headcount by over 1,000 and annualized personnel expenses by over $100 million, indicating cost-cutting measures in response to market conditions.
