Thursday, April 9, 2015

Weatherford International (WFT) Stock Is Up Today as Oil Prices Rebound

NEW YORK (TheStreet) -- Shares of Weatherford International were gaining 4.3% to $13.87 Thursday as oil prices rose, rebounding from recent losses. WTI crude oil for May delivery was up 0.9% to $50.86 a barrel Thursday afternoon, and Brent crude oil for May delivery was up 2.2% to $56.77 a barrel. Oil prices were rising due to comments from Iranian President Hassan Rouhani the country would only agree to curb its nuclear program if all economic sanctions are lifted at the beginning, according to Bloomberg. "The Iranian president's statement about needing sanctions to be lifted before implementing a nuclear deal seems to have sparked some buying," Tradition Energy senior analyst Gene McGillian told the news site. The rising oil prices come a day after the U.S. Energy Information Administration announced that U.S. crude oil inventories increased by 10.9 million barrels in the week that ended on April 3. The increase brought total U.S. crude oil stockpiles to 482.4 million barrels, the highest level in at least 80 years, according to the agency. Weatherford International provides products and services for drilling, evaluation, completion, production, and intervention of oil and natural gas wells. TheStreet Ratings team rates WEATHERFORD INTL PLC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation: "We rate WEATHERFORD INTL PLC (WFT) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and poor profit margins." Highlights from the analysis by TheStreet Ratings Team goes as follows: The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Energy Equipment & Services industry. The net income has significantly decreased by 75.3% when compared to the same quarter one year ago, falling from -$271.00 million to -$475.00 million. The debt-to-equity ratio of 1.08 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, WFT maintains a poor quick ratio of 0.87, which illustrates the inability to avoid short-term cash problems. The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market, WEATHERFORD INTL PLC's return on equity significantly trails that of both the industry average and the S&P 500. Net operating cash flow has decreased to $584.00 million or 11.78% 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. The gross profit margin for WEATHERFORD INTL PLC is currently lower than what is desirable, coming in at 31.04%. Regardless of WFT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, WFT's net profit margin of -12.74% significantly underperformed when compared to the industry average. You can view the full analysis from the report here: WFT Ratings Report Must Read: Warren Buffett's Top 25 Stocks for 2015


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