The firm also boosted its ratings on other offshore drillers including Atwood Oceanics (ATW), Transocean (RIG), Ensco (ESV) and Rowan (RDC).
For the first time in almost two years, analysts are taking a bullish stance on the oil sector based on their outlook that the global oil market will tighten during the second quarter of 2016 and that oil prices will increase at a faster pace, according to Barron's.com.
Specifically, offshore drillers will "benefit more from the rising tide of fund flows into the energy sector than from any improvement in industry fundamentals," the firm added.
Noble shares are retreating 2.82% to $13.11 on Monday afternoon.
Based in London, Noble Corporation operates as an offshore drilling contractor for the oil and gas industry worldwide.
Separately, TheStreet Ratings team rates NOBLE CORP PLC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate NOBLE CORP PLC (NE) 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 increase in net income, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 155.6% when compared to the same quarter one year prior, rising from $127.49 million to $325.81 million.
- The gross profit margin for NOBLE CORP PLC is rather high; currently it is at 57.76%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 42.88% significantly outperformed against the industry average.
- NOBLE CORP PLC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NOBLE CORP PLC swung to a loss, reporting -$0.67 versus $1.86 in the prior year. This year, the market expects an improvement in earnings ($2.65 versus -$0.67).
- NE'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 32.47%, 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. 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.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Energy Equipment & Services industry and the overall market on the basis of return on equity, NOBLE CORP PLC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- You can view the full analysis from the report here: NE