Story updated at 10 a.m. to reflect market activity.
WPX Energy gained 3.1% to $21.96 in morning trading.
The bank set a price target of $28 for the stock. According to Deutsche Bank analysts Stephen Richardson and Josh Silverstein WPX Energy is at an important inflection point.
"Q1 was an important inflection point for WPX; delivering operationally, a deal (and go forward partnership) monetizing a portion of the Piceance and the naming of a new CEO," the analysts wrote. "We continue to see plenty of opportunity for improvements at WPX and while we don't know incoming management yet (the CLR track record speaks volumes) our expectation is that we will see a renewed sense of urgency from WPX. While it is unclear how much of the previous business plan will be retained vs. jettisoned, and investors will need to be patient, the opportunity set at WPX is attractive."
Separately, TheStreet Ratings team rates WPX ENERGY INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate WPX ENERGY INC (WPX) 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 solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, WPX's share price has jumped by 39.54%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- WPX, with its decline in revenue, underperformed when compared the industry average of 0.2%. Since the same quarter one year prior, revenues fell by 20.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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, WPX ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $118.00 million or 42.43% 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: WPX Ratings Report