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Southwestern Energy Company Stock Hold Recommendation Reiterated (SWN)

NEW YORK ( TheStreet) -- Southwestern Energy Company (NYSE: SWN) has been reiterated by TheStreet Ratings as a hold with a ratings score of C. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and generally higher debt management risk.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 10.7%. Since the same quarter one year prior, revenues rose by 12.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • SOUTHWESTERN ENERGY CO has improved earnings per share by 16.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SOUTHWESTERN ENERGY CO swung to a loss, reporting -$2.03 versus $1.82 in the prior year. This year, the market expects an improvement in earnings ($1.95 versus -$2.03).
  • Net operating cash flow has decreased to $372.14 million or 16.31% when compared to the same quarter last year. Despite a decrease in cash flow of 16.31%, SOUTHWESTERN ENERGY CO is in line with the industry average cash flow growth rate of -25.63%.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, SOUTHWESTERN ENERGY CO's return on equity significantly trails that of both the industry average and the S&P 500.

Southwestern Energy Company, an independent energy company, engages in the exploration, development, and production of natural gas and oil primarily in the United States. The company operates through two segments, Exploration and Production, and Midstream Services. Southwestern Energy has a market cap of $13.4 billion and is part of the basic materials sector and energy industry. Shares are up 14.4% year to date as of the close of trading on Tuesday.

You can view the full Southwestern Energy Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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