NEW YORK (TheStreet) --Shares of PetroQuest Energy (PQ) were gaining 32.5% to $2.49 on heavy trading volume Monday following upgrades from two analyst firms.

Iberia Capital raised its rating for the oil company to "outperform" from "sector perform." The analyst firm also raised its price target for PetroQuest Energy to $3.50 from its previous price target of $3.

In a separate note to investors, analyst firm Raymond James upgraded PetroQuest to "outperform" from "market perform." The analyst firm set a price target of $3 for the company.

PetroQuest Energy is an energy company that engages in the exploration, development, acquisition and production of oil and natural gas reserves in Texas, Oklahoma, Louisiana and the shallow waters of the Gulf of Mexico.

About 2 million shares of PetroQuest were traded by 11:04 a.m. Monday, above the company's average trading volume of about 712,000 shares a day.

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

"We rate PETROQUEST ENERGY INC (PQ) a SELL. This is driven by a few notable 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 generally disappointing historical performance in the stock itself."

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 1168.3% when compared to the same quarter one year ago, falling from $11.32 million to -$120.96 million.
  • The debt-to-equity ratio is very high at 24.49 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.37, 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, PETROQUEST ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $23.23 million or 48.70% when compared to the same quarter last year. Despite a decrease in cash flow of 48.70%, PETROQUEST ENERGY INC is in line with the industry average cash flow growth rate of -53.19%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 70.77%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1360.00% compared to the year-earlier quarter. 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.
  • You can view the full analysis from the report here: PQ Ratings Report