NEW YORK (TheStreet) -- Shares of energy company Helmerich & Payne (HP) - Get Report fell more than 7% to a 52-week low of $59.01 on Wednesday after Howard Weil slashed its price target on the stock to $70 from $90.
The firm maintained its "outperform" rating on the stock.
Helmerich & Payne also filed an 8-K regulatory form on Wednesday morning with a presentation from the Goldman Sachs Global Energy Conference, which takes place today and tomorrow. The company announced in the presentation that the average spot pricing for its FlexRigs is down approximately 10% for the second quarter compared to the first quarter.
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The Tulsa, OK-based contract drilling company also said it expects another 40 to 50 FlexRigs to become idle and expects spot pricing to continue to soften in the next 30 days.
Separately, TheStreet Ratings team rates HELMERICH & PAYNE as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate HELMERICH & PAYNE (HP) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 16.1%. Since the same quarter one year prior, revenues rose by 13.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- HP's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, HP has a quick ratio of 2.16, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $320.63 million or 36.12% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 17.66%.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Energy Equipment & Services industry average. The net income increased by 5.6% when compared to the same quarter one year prior, going from $159.80 million to $168.69 million.
- 45.13% is the gross profit margin for HELMERICH & PAYNE which we consider to be strong. Regardless of HP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HP's net profit margin of 17.12% compares favorably to the industry average.
- You can view the full analysis from the report here: HP Ratings Report