High Oil and Gas Demand Worldwide Will Drive Profitable Top-Line Expansion for Weatherford

Weatherford International delivered strong results in the second quarter, posting sequential revenue growth of 13%, ahead of the firm’s prior guidance. The firm raised its full fiscal year guidance following the results, indicating top-line growth in the midteens for 2022. We think the revised guidance is warranted given the favorable outlook for global oil and gas production and development activity over the next few years—Rystad estimates suggest global oil and gas capital expenditures will average 5% through 2026. We’re slightly raising our fair value estimate to $37 from $36 following the results. Our no-moat rating and stable moat trend are unchanged.