Weatherford International plc: Delivering On Growth Despite Near-Term Headwinds, Upgrade To Buy

Research evidence excerpt

Weatherford International plc: Delivering On Growth Despite Near-Term Headwinds, Upgrade To Buy

Weatherford International plc UBS Research

UBS Research THESIS MAP Thesisa guideMapto our thinking and what´s where in this report

Pivotal Questions Q: Does WFRD have multiple drivers of earnings growth?

Yes. We see a combination of significant remediation/intervention work in the Middle East post-

conflict, a regional capex upcycle as producers look to seize market share, continuing MPD growth,

and a stronger outlook around Pemex as the key drivers behind earnings expansion. Combined, we

forecast Adj. EBITDA growing from $1.0Bn in FY26 to $1.2Bn in FY27. We forecast FCF conversion

improving from 44% in FY25 to 48% in FY27.

Q: Can WFRD extract more value from the NCSM acquisition?

Yes. Based on WFRD's successful track record across its cost-cutting initiatives and margin

enhancements at the corporate level, we project WFRD hits its >$15mm cost synergy target in 2027

vs. the assumption of within 18 months of closing. Further, we see the potential for non-

NAM revenues to grow from ~10% of total NCSM revenues to ~20% over time, or an incremental

~$4-$5mm of EBITDA.

UBS VIEW We upgrade WFRD to a Buy rating. We attribute the recent underperformance to near-term Middle

East headwinds. We see this pressure as temporary, with a post-conflict recovery driving a meaningful

acceleration in region activity, supported by an estimated ~$137.5Bn of regional O&G project

tenders. Further, WFRD is well positioned to benefit from growing offshore/deepwater development

activity through MPD, while improving Pemex collections support higher FCF conversion. Beyond

organic growth, the NCSM acquisition offers a value creation opportunity through cost synergies and

international expansion.