(By Balachander) Weatherford International Ltd. (NYSE:WFT) shares were downgraded to "Neutral" from "Buy" by UBS Securities, which cited continuing tax issues.
"While we sympathize with WFT given its substantial efforts in shoring up its tax books (all non cash issues), we believe the issue will overhang stock performance until resolution," UBS analyst Angie Sedita wrote.
The stock had a sharp sell-off yesterday and is likely due for a near-term partial recovery, Sedita said. "However, despite an improving international and N.American market and a solid outlook for better EPS in the 2H-12, we believe the uncertainty on the timing of the closing of the financial books will hinder near-term stock performance."
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The analyst, who reduced 2013 EPS estimate to $1.45 from $1.66, is of the view that tax issue may not be resolved until the end of 2012.
Sedita expects international margins to be in mid-teens by end of year and N.America to recover in 2H-12 on Canada and Artificial Lift pricing/vols.
Geneva, Switzerland-based Weatherford provides equipment and services used in the drilling, evaluation, completion, production, and intervention of oil and natural gas wells worldwide.
The stock, which has been trading in the 52-week range between $10.85 and $22.76, fell 4.16 percent to trade at $11.20 on Thursday.