Strength Seen in Weatherford (WFRD): Can Its 9.5% Jump Turn into More Strength?

Weatherford WFRD shares rallied 9.5% in the last trading session to close at $88.61. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 5.8% gain over the past four weeks.

The surge can be attributed to a brighter outlook for Weatherford’s oilfield services, given the recent geopolitical developments, which may open the door to Venezuela’s significant oil and gas reserves. The demand for oilfield services is anticipated to increase to support potentially higher Venezuelan oil production. Weatherford already operates across several locations in Latin America, including Brazil and Colombia. The technology and services provided by oilfield service providers like Weatherford should witness stronger demand if drilling activity and crude production ramp up in Venezuela. WFRD’s commitment to providing innovative oilfield services and the anticipated increase in infrastructure upgrades to revive Venezuela's upstream sector are likely to enhance the stock’s performance.

This oilfield service company is expected to post quarterly earnings of $1.50 per share in its upcoming report, which represents no change from the year-ago quarter. Revenues are expected to be $1.26 billion, down 6% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Weatherford, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on WFRD going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Weatherford belongs to the Zacks Oil and Gas - Field Services industry. Another stock from the same industry, Archrock Inc. (AROC), closed the last trading session 0.8% lower at $26.41. Over the past month, AROC has returned 6.8%.

For Archrock Inc., the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.4. This represents a change of +14.3% from what the company reported a year ago. Archrock Inc. currently has a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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