NEW YORK (TheStreet) -- Shares of Southwestern Energy Co. (SWN) - Get Southwestern Energy Company Report are down by 2.70% to $24.87 in late afternoon trading on Wednesday, as some oil and energy related stocks fall along with the price of the commodity.
Crude oil (WTI) is slipping by 3.85% to $44.45 per barrel and Brent crude is lower by 2.22% to $48.50 per barrel this afternoon, according to the Bloomberg index.
Oil prices are retreating today due to a rise in U.S. oil supplies and after two more major banks cut their 2015 price estimates.
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The American Petroleum Institute announced late Tuesday afternoon that weekly U.S oil inventories grew by 12.7 million barrels, triple what was expected, Reuters reports.
Barclays and Credit Suisse cut their price estimates on oil to $44 and $58 per barrel, respectively, for the year as they see no relief for crude prices, Reuters noted.
Oil prices have been down more than 55% since June due to a global supply glut. In November OPEC announced it had no intention of cutting its production rate despite the oversupply.
Separately, TheStreet Ratings team rates SOUTHWESTERN ENERGY CO as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate SOUTHWESTERN ENERGY CO (SWN) 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 revenue growth, growth in earnings per share and increase in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 6.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- SOUTHWESTERN ENERGY CO has improved earnings per share by 13.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SOUTHWESTERN ENERGY CO turned its bottom line around by earning $2.00 versus -$2.03 in the prior year. This year, the market expects an improvement in earnings ($2.29 versus $2.00).
- The current debt-to-equity ratio, 0.42, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that SWN's debt-to-equity ratio is low, the quick ratio, which is currently 0.54, displays a potential problem in covering short-term cash needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, SOUTHWESTERN ENERGY CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- SWN's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 38.08%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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: SWN Ratings Report