The analyst firm also raised its EPS estimates for the company through 2015. Hess' Bakken should continue to drive growth according to Credit Suisse analyst Edward Westlake.
"We believe HES has one of the dominant positions in the core of the Bakken. An average IP of 976boed is highly profitable given well cost reductions," Westlake wrote." The key for the November analyst day is the running room from downspacing and potential rig acceleration to drive value harder."
TheStreet Ratings team rates HESS CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate HESS CORP (HES) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, reasonable valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, HES's share price has jumped by 38.70%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HES should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Net operating cash flow has increased to $1,158.00 million or 41.39% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 16.72%.
- HES's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.75 is somewhat weak and could be cause for future problems.
- 37.88% is the gross profit margin for HESS CORP which we consider to be strong. Regardless of HES's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.94% trails the industry average.
- You can view the full analysis from the report here: HES Ratings Report