Weatherford (WFRD) Soars 6.5%: Is Further Upside Left in the Stock?

Weatherford (WFRD) shares rallied 6.5% in the last trading session to close at $88.5. 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 4.2% gain over the past four weeks.

The surge can be attributed to an improving outlook for Weatherford’s oilfield services business, particularly in international and offshore markets where drilling activity has gained momentum in recent years. Ramp-up of drilling activity in Latin America and the MENA region is strengthening the company’s growth prospects. Moreover, recent geopolitical developments related to Venezuela are further enhancing WFRD’s near-term outlook. The potential development of Venezuela’s vast oil and gas reserves would require extensive oilfield services, positioning Weatherford favorably given its operational history in Latin American markets such as Brazil and Argentina. With oil and gas continuing to play a significant role in the global energy mix, Weatherford’s innovative oilfield services and energy technology solutions are expected to witness sustained demand, supporting its profitability.

This oilfield service company is expected to post quarterly earnings of $1.42 per share in its upcoming report, which represents a year-over-year change of -5.3%. 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 been revised 15% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. 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 #3 (Hold). 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, Subsea 7 SA (SUBCY), closed the last trading session 3.5% higher at $22.86. Over the past month, SUBCY has returned 7.6%.

For Subsea 7, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.59. This represents a change of +742.9% from what the company reported a year ago. Subsea 7 currently has a Zacks Rank of #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research