NEW YORK ( TheStreet) -- Petrobras Argentina (NYSE: PZE) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, deteriorating net income and disappointing return on equity. Highlights from the ratings report include:
- PZE'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 58.87%, 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. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, PZE is still more expensive than most of the other companies in its industry.
- 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 79.6% when compared to the same quarter one year ago, falling from $161.62 million to $32.90 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PETROBRAS ARGENTINA SA's return on equity significantly trails that of both the industry average and the S&P 500.
- The revenue fell significantly faster than the industry average of 11.9%. Since the same quarter one year prior, revenues fell by 21.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- PETROBRAS ARGENTINA SA 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, PETROBRAS ARGENTINA SA reported lower earnings of $0.00 versus $1.48 in the prior year. This year, the market expects an increase in earnings to $1.68 from $0.00.
-- Written by a member of TheStreet Ratings Staff