NEW YORK (TheStreet) -- Swift Energy(SFY) - Get Report stock was downgraded to "sector weight" from "overweight" at KeyBanc Capital Markets on Tuesday, based on a valuation call.

The firm also adjusted its oil and gas estimates for 2015 and 2016 due to lower demand in China and Europe.

Crude oil prices are now estimated to be at $57 per barrel in the second half of 2015, down from $61 per barrel. For 2016 prices are estimated to be at $65 per barrel. 

Oil production, however, is expected to increase 19% in the third quarter, KeyBanc said in an analyst note.

The price for crude oil (WTI) is up 1.38% to $52.92 per barrel and Brent crude is gaining by 0.95% to $58.40 per barrel this afternoon, according to CNBC.com.

Swift Energy stock closed higher by 1.6% to $1.27 on Tuesday.

Swift Energy will release its 2015 second quarter financial report before the market open on August 6. 

Separately, TheStreet Ratings team rates SWIFT ENERGY CO as a Sell with a ratings score of E+. TheStreet Ratings Team has this to say about their recommendation:

"We rate SWIFT ENERGY CO (SFY) a SELL. This is based on a variety of negative investment measures, which should drive this stock to significantly underperform the majority of stocks that we rate. 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 8866.6% when compared to the same quarter one year ago, falling from $5.44 million to -$477.08 million.
  • The debt-to-equity ratio is very high at 3.52 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 0.45, 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, SWIFT ENERGY CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$0.77 million or 101.10% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 88.96%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 9091.66% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • You can view the full analysis from the report here: SFY Ratings Report