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It's been a sad week for Weatherford International plc (NASDAQ:WFRD), who've watched their investment drop 11% to US$32.28 in the week since the company reported its quarterly result. It was a pretty bad result overall; while revenues were in line with expectations at US$938m, statutory losses exploded to US$1.14 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Weatherford International after the latest results.
Taking into account the latest results, the consensus forecast from Weatherford International's three analysts is for revenues of US$4.12b in 2022, which would reflect a meaningful 9.8% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 77% to US$1.36. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$4.11b and losses of US$1.02 per share in 2022. So it's pretty clear the analysts have mixed opinions on Weatherford International even after this update; although they reconfirmed their revenue numbers, it came at the cost of a sizeable expansion in per-share losses.
Despite expectations of heavier losses next year,the analysts have lifted their price target 12% to US$51.33, perhaps implying these losses are not expected to be recurring over the long term. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Weatherford International, with the most bullish analyst valuing it at US$63.00 and the most bearish at US$36.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Weatherford International's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Weatherford International is forecast to grow faster in the future than it has in the past, with revenues expected to display 13% annualised growth until the end of 2022. If achieved, this would be a much better result than the 11% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 9.8% per year. Not only are Weatherford International's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Weatherford International going out to 2023, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Weatherford International .
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.