Rating Change #2
Hess Corp (HES) has been upgraded by TheStreet Ratings from hold to buy. The company's strongest point has been its expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- HESS CORP's earnings per share declined by 41.6% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, HESS CORP reported lower earnings of $5.01 versus $6.50 in the prior year. This year, the market expects an improvement in earnings ($6.50 versus $5.01).
- The revenue fell significantly faster than the industry average of 25.3%. Since the same quarter one year prior, revenues slightly dropped by 5.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 36.03%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 41.60% compared to the year-earlier quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.
- The gross profit margin for HESS CORP is rather low; currently it is at 23.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.60% trails that of the industry average.
- Net operating cash flow has decreased to $988.00 million or 12.95% 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.
Hess Corporation, together with its subsidiaries, operates as an integrated energy company. The company operates in two segments, Exploration and Production (E&P) and Marketing and Refining (M&R). The company has a P/E ratio of 11, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Hess has a market cap of $18.8 billion and is part of the basic materials sector and energy industry. Shares are down 9.9% year to date as of the close of trading on Thursday.You can view the full Hess Ratings Report or get investment ideas from our investment research center.
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