UPDATE: Weatherford (WFT) Shares Continue Lower as UBS Downgrades to Neutral

(Updated - July 26, 2012 3:35 PM EDT)

UBS downgraded Weatherford International (NYSE: WFT) from Buy to Neutral Thursday morning.

UBS said, "While we sympathize with WFT given its substantial efforts in shoring up its tax books (all non cash issues), we believe the issue will overhang stock performance until resolution." The firm is modeling for a partial recovery over the near term even as "the uncertainty on the timing of the closing of the financial books will hiinder near-term stock performance."

The firm noted several key takeaways:

• tax issue may not be resolved til the end of this year;
  
• tax issues won't affect pre-tax earnings as they are non-cash;
  
• an implication by the company "the FCPA charges are less of an issue than the sanctioned countries";
  
• possible impairment of goodwill in the international segment during Q3;
  
• international margins which will likely be in the mid-teens range by year end; and
  
• a recovery in North America given "Canada and Artificial Lift
  pricing/vols."

Shares of Weatherford plunged nearly 9 percent on Wednesday following concerning preliminary Q2 results from the company on Tuesday afternoon. The stock is continuing lower once again Thursday, now down about 2.1 percent to $11.42.

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

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