"Newfield has solid liquidity and manageable debt maturities - combined with a robust hedge profile, we believe Newfield is an attractive investment in a depressed commodity environment," the firm said in an analyst note.
The company's program at the Anadarko basin has made impressive progress and is considered one of the top areas in the basin, the firm added. Cantor Fitzgerald analysts expect positive momentum from the basin to continue into 2016.
The Woodlands, TX-based energy company is engaged in the exploration, development and production of crude oil, natural gas and natural gas liquids.
Shares of Newfield Exploration closed up by 0.72% to $30.63 on Tuesday.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate NEWFIELD EXPLORATION CO as a Sell with a ratings score of D+. 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 deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow 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 541.4% when compared to the same quarter one year ago, falling from $278.00 million to -$1,227.00 million.
- The debt-to-equity ratio of 1.23 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.38, which clearly demonstrates the inability to cover short-term cash needs.
- 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, NEWFIELD EXPLORATION CO's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has declined marginally to $312.00 million or 7.41% when compared to the same quarter last year. Despite a decrease in cash flow NEWFIELD EXPLORATION CO is still fairing well by exceeding its industry average cash flow growth rate of -26.70%.
- NEWFIELD EXPLORATION CO 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, NEWFIELD EXPLORATION CO increased its bottom line by earning $4.70 versus $0.79 in the prior year. For the next year, the market is expecting a contraction of 83.0% in earnings ($0.80 versus $4.70).
- You can view the full analysis from the report here: NFX