NEW YORK (TheStreet) -- Shares of Anadarko Petroleum Corp. (APC) - Get Report closed higher by 1.04% to $83.20 on Thursday afternoon, as some energy stocks were driven into the green today thanks to the rally in oil prices.
Crude oil (WTI) is up by 4.19% to $51.27 per barrel and Brent crude is gaining by 4.50% to $59.02 per barrel this afternoon, according to the CNBC.com index.
Oil prices popped today as a result of the conflict in the Middle East between Saudi Arabia and the Houthi rebels in Yemen.
On Wednesday Saudi Arabia announced that it would launch airstrikes against the rebels, which continued into Thursday. This sparked concerns that the conflict would disrupt oil supplies in the region.
Concerns regarding the possible disruptions come as oil demand is stronger than expected, which has caused traders to pay closer attention to geopolitical concerns, the New York Times reports.
"The importance of this is perhaps that the market has begun to react to geopolitical supply risks once again, a trend that has been absent in recent months," analysts at Energy Aspects wrote in a note to clients, the Times added.
So far the airstrikes have not disrupted major oil facilities of key Gulf producers, such as top oil exporter Saudi Arabia, but there are worries the conflict will spread. As a result of the fighting Yemen's small scale oil output has been disrupted for months, Reuters reports.
Separately, TheStreet Ratings team rates ANADARKO PETROLEUM CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate ANADARKO PETROLEUM CORP (APC) 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 increase in net income, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 48.7% when compared to the same quarter one year prior, rising from -$770.00 million to -$395.00 million.
- ANADARKO PETROLEUM CORP has improved earnings per share by 49.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ANADARKO PETROLEUM CORP swung to a loss, reporting -$3.51 versus $1.57 in the prior year. This year, the market expects an improvement in earnings (-$1.27 versus -$3.51).
- In its most recent trading session, APC has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
- 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, ANADARKO PETROLEUM CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: APC Ratings Report