Weatherford International plc (NASDAQ:WFRD), a global oilfield service company, announced today the filing of a prospectus supplement for the resale of 50,417 ordinary shares. The shares are to be sold by stakeholders of Probe Technologies Holdings, Inc., following an earnout agreement related to Weatherford's acquisition of Probe Technologies.
The prospectus supplement, filed with the U.S. Securities and Exchange Commission (SEC), is an addition to the company's Registration Statement on Form S-3ASR filed on June 15, 2022. It details the terms under which the selling shareholders may sell their shares, which have a nominal value of $0.001 each.
This filing is in connection with the earnout provision of the acquisition agreement, which typically allows for additional compensation to the sellers based on the performance of the acquired entity post-acquisition. The ordinary shares being offered by the selling shareholders are being issued as part of this provision.
Alongside the prospectus supplement, Weatherford has filed a legal opinion by Matheson LLP as Exhibit 5.1 to the current report on Form 8-K. This legal opinion is incorporated by reference into the Registration Statement, ensuring all legal requirements are met for the share resale.
In other recent news, Weatherford International reported a 10% year-over-year revenue increase in its Q2 2024 earnings call, primarily driven by its international business. The company also announced a $1 per share annual dividend and a $500 million share buyback over three years. Goldman Sachs maintained its Buy rating on Weatherford, with a price target of $137.00, citing the potential for technology-driven revenue growth. However, Citi lowered its price target for the company to $130 from $155, expecting a slowdown in offshore and onshore operations but still predicting a 4% growth for Weatherford.
In further developments, Weatherford acquired Datagration Solutions Inc., a strategic move aimed at enhancing the company's digital offerings and streamlining operating efficiencies. This acquisition is expected to integrate Weatherford's digital solutions with Datagration's unified data models, improving decision-making throughout the well lifecycle. Citi's analysis anticipates significant free cash flow for Weatherford, with over $500 million in 2024 and nearly $750 million in 2025.
InvestingPro Insights
To provide additional context to Weatherford International's (NASDAQ:WFRD) recent filing, let's examine some key financial metrics and insights from InvestingPro.
Weatherford's market capitalization stands at $6.71 billion, reflecting its significant presence in the oilfield services sector. The company's P/E ratio of 13.3 suggests a relatively modest valuation compared to its earnings, which could be attractive to value-oriented investors.
InvestingPro Tips highlight that Weatherford is trading at a low P/E ratio relative to its near-term earnings growth, with a PEG ratio of just 0.14 for the last twelve months as of Q2 2024. This indicates that the stock may be undervalued considering its growth prospects. Additionally, the company operates with a moderate level of debt and has liquid assets exceeding short-term obligations, which speaks to its financial stability.
Despite these positive indicators, it's worth noting that Weatherford's stock price has fallen significantly over the last three months, with a total return of -32.26%. This decline could be related to broader market conditions or sector-specific challenges.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips that could provide deeper insights into Weatherford's financial health and market position.
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