NEW YORK (TheStreet) -- Shares of WPX Enegy (WPX) - Get WPX Energy, Inc. Report are rising 11.64% to $7 in afternoon trading on Friday as stocks in the oil and energy sector continue to climb on higher oil prices.
After falling to six-year lows earlier this week, oil prices could be headed toward their biggest two-day gain in six years today, Reuters reports.
One factor potentially contributing to the upswing in prices is concern about Tropical Storm Erika as it heads toward Florida and possibly the Gulf of Mexico, where more than 45% of the U.S. petroleum refining capacity is located, according to Reuters.
Further, strong U.S. economic data released this week and reports of a refinery outage in Nigeria also are helping drive up oil prices today.
Crude oil (WTI) is higher by 5.71% to $44.99 per barrel this afternoon and Brent crude up by 4.96% to $49.92 per barrel, according to the CNBC.com index.
Separately, TheStreet Ratings team rates WPX ENERGY INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate WPX ENERGY INC (WPX) 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 compelling growth in net income, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow 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 Oil, Gas & Consumable Fuels industry. The net income increased by 77.8% when compared to the same quarter one year prior, rising from -$135.00 million to -$30.00 million.
- The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.83 is somewhat weak and could be cause for future problems.
- The gross profit margin for WPX ENERGY INC is currently lower than what is desirable, coming in at 30.28%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -10.56% is significantly below that of the industry average.
- Net operating cash flow has decreased to $236.00 million or 24.84% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, WPX ENERGY INC has marginally lower results.
- You can view the full analysis from the report here: WPX Ratings Report