NEW YORK (TheStreet) -- Shares of oil drilling company Seadrill were falling 5% to $9.45 Monday as oil prices continued to fall to new lows. WTI crude oil for February delivery was falling 3.5% to $46.65 a barrel Monday morning, and Brent crude oil for February delivery was falling 3.6% to $48.32 a barrel. Oil prices have fallen for seven straight weeks and are approaching their lowest levels since April 2009, according to Reuters. Goldman Sachs analysts lowered their three month forecasts for WTI crude oil to $41 a barrel from $70, and to $42 a barrel from $80 for Brent. The firm lowered its 2015 forecast for WTI to $47.15 a barrel from $73.75, and to $50.40 a barrel from $83.75 for Brent as prices continue to decline. Exclusive Report: Jim Cramer's Best Stocks for 2015 STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. "To keep all capital sidelined and curtail investment in shale until the market has rebalanced, we believe prices need to stay lower for longer," Goldman Sachs analysts told Reuters. Increased production in U.S. shale oil is a driver for the recent decline in oil prices. TheStreet Ratings team rates SEADRILL LTD as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation: "We rate SEADRILL LTD (SDRL) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and weak operating cash flow." Highlights from the analysis by TheStreet Ratings Team goes as follows: SDRL's revenue growth trails the industry average of 15.9%. Since the same quarter one year prior, revenues slightly increased by 1.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share. Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Energy Equipment & Services industry and the overall market, SEADRILL LTD's return on equity significantly exceeds that of both the industry average and the S&P 500. The gross profit margin for SEADRILL LTD is rather high; currently it is at 55.61%. Regardless of SDRL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 11.52% trails the industry average. The debt-to-equity ratio of 1.33 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, SDRL maintains a poor quick ratio of 0.84, which illustrates the inability to avoid short-term cash problems. Net operating cash flow has decreased to $397.00 million or 25.51% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower. You can view the full analysis from the report here: SDRL Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
Click to view a price quote on SDRL. Click to research the Energy industry.
from Latest TSC Headlines http://ift.tt/1y4KiHI
No comments:
Post a Comment