Goldman Sachs Reiterates Buy Rating on Weatherford International plc (WFRD)

Goldman Sachs analyst Ati Modak reiterated a Buy rating and $137.00 price target on Weatherford International plc (NASDAQ: WFRD).

The analyst comments "We recently attended the FWRD Technology Conference hosted by WFRD in Houston, meeting with Girish Saligram (CEO), Arun Mitra (CFO), Depinder Sandhu (EVP Global Product Lines and Technology), and Luke Lemoine (SVP Corporate Development and IR), along with several senior members of management and customers. We reiterate our Buy rating as we believe WFRD can grow revenue idiosyncratically through industry leading technology that solve specific customer needs for process enhancement, automation, and digitalization. This growth is likely in addition to the base business, and in certain cases, regardless of headline rig count expectations, because of low current penetration rates of certain technologies. As WFRD introduces customers to new solutions on a pilot basis, enabling recognition of benefits, and possibly resulting in replication across operations, we see potential for continued top-line growth, margin expansion, and free cash flow improvement. We believe the WFRD story is still idiosyncratic, but evolving from internal operational optimization, to one of technology driven growth. While large cap peers are also likely to participate in this industry trend, we see benefits in first mover advantage and comprehensive solutions built on multi-decade R&D. At current share price, WFRD is trading at a ~4.0x through cycle EV/EBITDA multiple and ~14% free cash flow yield, which for a company that can deliver growth in excess of activity, seems oversold. At current price, shares are reflecting 3-5% annual revenue decline through 2030, which given the technology differentiation, we believe at least low single digit revenue growth is possible, even in a flat activity scenario."

For an analyst ratings summary and ratings history on Weatherford International plc click here. For more ratings news on Weatherford International plc click here.

Shares of Weatherford International plc closed at $89.84 yesterday.

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