ConocoPhillips (COP) Stock Climbs Along With Crude Ahead of OPEC Meeting

ConocoPhillips (COP) shares are rising along with West Texas crude futures contracts.
By Tony Owusu ,

NEW YORK (TheStreet) -- Shares of ConcoPhillips (COP) - Get Report are up 1.16% to $54.10 in afternoon trading on Monday as climbing domestic crude prices lift the oil sector today.

Oil futures are climbing ahead of this week's OPEC meeting on Friday despite analysts' expectations that the oil cartel will maintain its current production levels.

Crude prices have fallen sharply over the past 18 months as OPEC has maintained its production levels despite increased supplies from U.S. shale operations.

During the third quarter, ConocoPhillips reported daily production averaged 1.554 million barrels of oil equivalent. For the year, the company expects to deliver annual average production growth between 3% and 5%.

OPEC's supply policy along with increased production from other producers has resulted in a supply glut which has continued to put negative pressure on crude contracts.

Industry standard Brent crude for January delivery is down .4% to $44.68 per barrel, while West Texas crude for January delivery is up 0.91% to $42.09 per barrel.

TheStreet Ratings team rates CONOCOPHILLIPS as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate CONOCOPHILLIPS (COP) 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. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

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

  • COP, with its decline in revenue, slightly underperformed the industry average of 36.7%. Since the same quarter one year prior, revenues fell by 39.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.56, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.83 is weak.
  • The share price of CONOCOPHILLIPS has not done very well: it is down 24.19% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
  • The gross profit margin for CONOCOPHILLIPS is currently lower than what is desirable, coming in at 29.54%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -14.74% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $1,934.00 million or 53.73% 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: COP

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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