WFT Premium Somewhat Justified

Tags: wft
25 Oct 10:22pm
Posted by ZacksResearch
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 Zacks oil sector analyst Sheraz A. Mian is restating his Hold rating on Weatherford International, Ltd. (WFT), in an update on the manufacturer of drilling equipment for oil and natural gas wells. We excerpted the following details:

'We are maintaining our Hold recommendation for Weatherford shares following the company's moderately better than expected third-quarter 2007 results. Strong international results and the Canadian recovery helped the quarterly results. We believe that Weatherford's strong leverage to the current cycle and its growing international presence are adequately reflected in its premium valuation relative to the peer group.

'Our preferred names in this space include Baker-Hughes (BHI) and National-Oilwell Varco (NOV). We have raised our EPS estimates for 2007 ($3.36 vs. $3.26) and 2008 ($4.40 vs. $4.28) to reflect international growth and an improved Canadian outlook.

'Weatherford shares command a valuation premium relative to its peers, based on most conventional metrics. The company's strong leverage to the current cycle and its growing international base of operations justify some of this premium, but leave little room for upside, in our view. While we continue to like Baker Hughes and Halliburton (HAL) among the majors, we also like National-Oilwell Varco and W-H Energy (WHQ) in this space.'

Read the full analyst report on WFT.

Read the full analyst report on BHI.

Read the full analyst report on NOV.

Read the full analyst report on HAL.

Read the full analyst report on WHQ.




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