Analysts have been bullish on Weatherford International Plc (NYSE: WFT) in this month. Clarkson Capital enhanced their rating from Neutral while Cowen and Company reiterated their Outperform rating. Morgan Stanley, Credit Suisse Group AG and Evercore ISI also reiterated their Overweight rating on the stock. Capital One Financial Corp enhanced their “Equal Weight ” rating to an ” Overweight” rating.
Weatherford International has appointed Mr. Mark A. McCollum as President and Chief Executive Officer, as well as a member of the Board of Directors, with an effective start date in late April 2017. He is the former Halliburton company CFO and an Executive Vice President. This appointment has been taken by the market very positively. There were also rumors that the appointment increases the likelihood that Halliburton will acquire WFT in the future.
Weatherford International has raised over $3 billion in capital in the first half of 2016 and has raised nearly $1 billion under Shivram through a mix of debt and equity securities. The company has recently filed a $2.5 billion shelf registration for warrants ($543 million) and other securities ($2 billion). The warrants have an exercise price of $6.43 per share, and 84.5 million shares are issuable. If the warrants are exercised, it would increase WFT’s share count from 982.8 million to 1.067 billion.
The Renewed drilling activity in North America has provided a mini-rebound for WFT and other oil service firms but the increased drilling activity could potentially mute the future benefits from OPEC’s supply cut.
Moreover, Weatherford International has announced the development and deployment of a high-performance cement retainer and bridge plug for use in wells in Sakhalin Island, Russia. This is among the several WFT completion technologies fully qualified for deployment in Sakhalin wells.
On the other hand, Weatherford International in the fourth quarter has reported 4% growth in the revenue sequentially, despite approximately $40 million of lost revenue as the company idled the U.S. pressure pumping business during the quarter. The sequential operating income incremental were 68% that exceeded the target 50%. Excluding the land drilling rig business, the revenue grew 4% with operating income incremental of 73% that reflects the power of increased revenue spread over a low and efficient fixed cost base.
In the full year 2016, Weatherford International had reduced the net debt and extended debt maturities through a series of capital market transactions and the company achieved annualized cost savings of $601 million. WFT had reduced the nonproductive time in core product lines by 24 percent year-over-year.
As per tipranks.com, 9 analysts has covered the stock while recommending a “Moderate Buy”. WFT has an average price target of $7.56, which is a further upside of 28.56%. The stock already rallied over 12.4% on March 8th, 2017 (Source: Google finance)