NEW YORK (TheStreet) -- Shares of Cabot Oil & Gasundefined were gaining 4.8% to $29.75 Wednesday as oil prices were rising due to Saudi comments about increasing demand.
West Texas crude oil for April delivery was gaining 1.5% to $50 a barrel Wednesday afternoon, and Brent crude oil for April delivery was gaining 2.3% to $60.03 a barrel.
Oil prices were rising following comments from Saudi Arabia oil minister Ali al-Naimi, according to Reuters. Naimi said that "markets are calm now," and that "demand is growing" for oil. The oil minister helped drive a change in OPEC's strategy last year when it decided to not lower its production guidance despite falling oil prices, according to Reuters.
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"They want to find out where the floor price is. I think they are indicating that we are not that far off the floor in the current price," Global Insight oil analyst Simon Wardell told Reuters. Wardell added that the oil minister's comments indicated a desire for stability in the market.
Increased demand for the commodity from the factory sector in China also helped drive up oil prices. China is currently the second largest consumer of oil behind the U.S.
TheStreet Ratings team rates CABOT OIL & GAS CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CABOT OIL & GAS CORP (COG) 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 robust revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 20.1%. Since the same quarter one year prior, revenues rose by 26.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $293.19 million or 13.70% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -15.92%.
- The gross profit margin for CABOT OIL & GAS CORP is currently very high, coming in at 75.15%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -35.88% is in-line with the industry average.
- CABOT OIL & GAS CORP 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, CABOT OIL & GAS CORP reported lower earnings of $0.24 versus $0.67 in the prior year. For the next year, the market is expecting a contraction of 12.5% in earnings ($0.21 versus $0.24).
- 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 384.5% when compared to the same quarter one year ago, falling from $77.95 million to -$221.77 million.
- You can view the full analysis from the report here: COG Ratings Report