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Weatherford International: Valuation, Analyst Targets, and More

PART:
1 2 3 4 5 6 7
Part 5
Weatherford International: Valuation, Analyst Targets, and More PART 5 OF 7

Weatherford’s 7-Day Stock Price Forecast

Weatherford International’ implied volatility

On September 12, Weatherford International’s (WFT) implied volatility was 49.3%. Since its 2Q17 financial results were declared on July 28, WFT’s implied volatility (or IV) has fallen from ~62% to the current level. Implied volatility (or IV) signals a stock’s potential price movement as viewed by options traders.

WFT’s IV was near its two-year high in January 2016, when it reached 118%. Since then, it has subsided gradually. WFT is 4.5% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES). XES fell 13% in the past year versus a 33% fall in WFT’s stock price. Learn more about WFT in Market Realist’s What’s Keeping Weatherford Down despite Margin Improvement?Weatherford’s 7-Day Stock Price Forecast

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Crude oil’s implied volatility

Since July 28, crude oil’s implied volatility has fallen from 29% to ~27%. In May, crude oil’s implied volatility was at its highest (~33%) in 2017 so far.

Implied volatility for WFT’s peers

Precision Drilling Corporation’s (PDS) implied volatility on September 12 was 59%, so PDS’s stock price could vary between $3.08 and $2.62 in the next seven days. Halliburton’s (HAL) implied volatility was ~22% on September 12. So HAL’s stock price could vary between $43.07 and $40.49 in the next seven days. CARBO Ceramics’ (CRR) implied volatility on September 12 was ~29%, which implies CRR’s stock price could vary between $8.49 and $7.03 in the next seven days.

The energy sector makes up 5.7% of the S&P 500 Index (SPX-INDEX). The SPX-INDEX rose 17% in the past year. Read more about top oilfield service companies’ performance in Market Realist’s SLB, HAL, NOV, WFT: How They Stack Up after 2Q17.

Seven-day stock price forecast for Weatherford

Based on Weatherford International’s implied volatility and assuming a normal distribution of stock prices and one standard-deviation probability of 68.2%, WFT’s stock will likely close between $4.48 and $3.90 in the next seven days. WFT’s stock price was $4.19 on June 12.

In the next part of this series, we’ll discuss WFT’s correlation with crude oil prices.

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