Goldman Sachs analyst Ati Modak downgraded Weatherford International plc (NASDAQ:WFRD) to Neutral and lowered the target price to $98 from $132.
While WFRD remains a high-quality stock with a solid execution record, the analyst notes the current environment makes international-focused exposure less compelling compared to other energy investment options.
Meanwhile, the analyst anticipates earnings growth driven by increased adoption of Managed Pressure Drilling and innovations like RFID technology, alongside margin expansion even in a flat revenue growth environment.
The analyst estimates a total return potential of 4% for every dollar invested in Weatherford over the next 12 months, comprising a 1% dividend yield, ~1% from share repurchases, and ~2% upside to consensus estimates.
Based on their estimates, the analyst says that WFRD's planned ~$500 million debt reduction in 2025 could theoretically add ~$9 per share in implied value.
However, Modak expects the current environment to prioritize incremental improvements in shareholder returns driven by ongoing deleveraging efforts.
The analyst lowered the 2025/2026 EBITDA estimates by -3%/-8%, reflecting adjusted activity expectations and reduced capital returns.
Investors can gain exposure to the stock via Invesco Dorsey Wright Energy Momentum ETF (NASDAQ:PXI) and Invesco Dorsey Wright Energy Momentum ETF (NYSE:PXJ).
Price Action: WFRD shares are down 1.99% at $76.49 at the last check Friday.
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