Jefferies Reports Weatherford Shares Should React Well

In a report published by Jefferies, Weatherford Int'l WFT shares should be reacting well.

Jefferies said that WFT filed an 8K last night and cut its 1Q EPS guidance to $0.18 owing to disruptions in North Africa, weather around the world and a higher tax rate. “Importantly, WFT guided its 2011 tax rate to 27% from 20%, 200-300 basis points below many investors' expectations (following the tax rate issues announced on March 1). WFT also suspended its 2011 EPS guidance due to political unrest. We believe the shares will react well today. Our $28 price target is based on 8.0x 2012 EV/EBITDA and 16-17x EPS, within the historical average. Risks include a potential FCPA legal settlement, a drop in drilling activity, a worldwide economic slowdown, and a material decline on oil and gas prices.”

Weatherford Int'l closed yesterday at $20.45.