WPX Energy (WPX) Stock Falling Amid Oil Price Slump

WPX Energy (WPX) stock is down as oil prices retreat today.
By Amanda Schiavo ,

NEW YORK (TheStreet) -- Shares of WPX Energy (WPX) - Get Report are down by 2.30% to $8.48 in midday trading on Tuesday afternoon, as the energy sector takes a hit today from the decline in oil prices.

The commodity is reversing gains its saw on Monday spurred by security concerns in the wake of the deadly terrorist attack in Paris on Friday. Investor focus is shifting back towards the continuing global supply glut.

Crude oil (WTI) is slipping by 1.94% to $40.93 per barrel this afternoon and Brent crude is lower by 1.66% to $43.82 per barrel.

Despite the terror attacks in Paris on Friday and France's retaliation against the Islamic State in Syria, analysts are expecting prices to remain low for the rest of the year and into 2016 as oil markets remain over supplied, Reuters reports.

"Unless the geopolitical tensions, which have obviously risen since Friday, are going to be manifested in physical supply destruction in the Middle East, I think sentiment should remain more bearish than bullish," PVM Oil Associates analyst Tamas Varga told Reuters.

Separately, TheStreet Ratings team rates WPX ENERGY INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

We rate WPX ENERGY INC (WPX) a SELL. This is driven by several 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 unimpressive growth in net income, generally high debt management risk, weak operating cash flow, 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 471.0% when compared to the same quarter one year ago, falling from $62.00 million to -$230.00 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 50.51%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 291.30% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • WPX's debt-to-equity ratio of 0.67 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that WPX's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.52 is low and demonstrates weak liquidity.
  • Net operating cash flow has decreased to $199.00 million or 23.16% when compared to the same quarter last year. Despite a decrease in cash flow of 23.16%, WPX ENERGY INC is in line with the industry average cash flow growth rate of -26.28%.
  • WPX ENERGY INC 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, WPX ENERGY INC turned its bottom line around by earning $0.62 versus -$5.43 in the prior year. For the next year, the market is expecting a contraction of 153.2% in earnings (-$0.33 versus $0.62).
  • You can view the full analysis from the report here: WPX

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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