Analysts Are Updating Their Weatherford International plc (NASDAQ:WFRD) Estimates After Its Second-Quarter Results

Last week, you might have seen that Weatherford International plc (NASDAQ:WFRD) released its second-quarter result to the market. The early response was not positive, with shares down 9.4% to US$118 in the past week. It was a credible result overall, with revenues of US$1.4b and statutory earnings per share of US$1.66 both in line with analyst estimates, showing that Weatherford International is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Weatherford International

Taking into account the latest results, the consensus forecast from Weatherford International's nine analysts is for revenues of US$5.72b in 2024. This reflects an okay 5.2% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be US$6.80, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$5.76b and earnings per share (EPS) of US$7.21 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at US$150, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Weatherford International, with the most bullish analyst valuing it at US$184 and the most bearish at US$85.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Weatherford International's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 0.8% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Weatherford International is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$150, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Weatherford International. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Weatherford International analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Weatherford International that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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