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Will This Estimate Cut Hurt Noble (NE) Today?

Story updated at 9:40 a.m. to reflect market activity.

NEW YORK (TheStreet) -- Credit Suisse cut its estimates for Noble (NE) through 2015 Friday while setting a new price target of $40.

Shares of Noble fell 0.2% to $28.92 in morning trading.

The firm reiterated its "outperform" rating for the oil rig operator. The cut is due to Noble seeing increased idle time for its rigs according to Credit Suisse analysts.

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Separately, TheStreet Ratings team rates NOBLE CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate NOBLE CORP (NE) 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 robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 7.9%. Since the same quarter one year prior, revenues rose by 20.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • NOBLE CORP has improved earnings per share by 36.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, NOBLE CORP increased its bottom line by earning $3.06 versus $2.05 in the prior year. This year, the market expects an improvement in earnings ($3.40 versus $3.06).
  • Net operating cash flow has increased to $540.66 million or 20.09% when compared to the same quarter last year. Despite an increase in cash flow, NOBLE CORP's average is still marginally south of the industry average growth rate of 22.81%.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Energy Equipment & Services industry and the overall market, NOBLE CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • NE has underperformed the S&P 500 Index, declining 10.88% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • You can view the full analysis from the report here: NE 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.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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