Nabors Industries (NBR) Stock Gains as Oil Prices Rebound
NEW YORK (TheStreet) -- Nabors Industries (NBR) - Get Report stock is advancing 3.43% to $9.64 in afternoon trading on Wednesday after oil prices recovered from earlier losses following the release of the Fed policy meeting minutes, which showed support for a December interest rate hike, Reuters reports.
WTI crude is up 0.52% to $40.88 per barrel, while Brent crude is increasing 1.77% to $44.34 per barrel this afternoon, according to the CNBC.com index.
A rise in interest rates would make oil and other commodities traded in dollars more expensive to hold, Reuters noted.
Oil prices slipped earlier today after the U.S. Energy Information Administration reported a 252,000-barrel increase in commercial crude oil inventories for the week ended November 13.
Production declined to 9.18 million barrels per day last week, from 9.19 million barrels per day the previous week.
"This week's data point is unlikely going to relieve the selling pressure on the oil markets with U.S. stocks at record levels for this time of year and knocking on the all-time high set earlier in the year," Caprock Risk Management analysts Chris Jarvis told Reuters. "Production remains resilient even in this low price environment."
Bermuda based Nabors Industries operates a fleet of land-based drilling rigs.
Separately, TheStreet Ratings team rates NABORS INDUSTRIES LTD as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
We rate NABORS INDUSTRIES LTD (NBR) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Energy Equipment & Services industry. The net income has significantly decreased by 379.0% when compared to the same quarter one year ago, falling from $106.05 million to -$295.83 million.
- 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 Energy Equipment & Services industry and the overall market, NABORS INDUSTRIES LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 46.52%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 352.94% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- NABORS INDUSTRIES LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, NABORS INDUSTRIES LTD swung to a loss, reporting -$2.35 versus $0.51 in the prior year. This year, the market expects an improvement in earnings (-$0.31 versus -$2.35).
- Along with the very weak revenue results, NBR underperformed when compared to the industry average of 30.8%. Since the same quarter one year prior, revenues plummeted by 53.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: NBR
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.