NEW YORK (TheStreet) -- Petroquest Energy (PQ) was rising 8.82% to $4.32 on Friday afternoon after FBR Capital upgraded shares to "outperform" from "market perform," and raised its target price to $8 from $7.
"Within our small-cap coverage group, PetroQuest Energy provides the best exposure," the firm said in its report. "Also, we are fans of its Thunder Bayou exploratory prospect. We expect results in early 4Q14, and we believe it could be a lookalike to the highly successful La Cantera project and could be worth as much as $2.25 per share. We are also fans of progress achieved in the Woodford liquids shale play. We believe the progress in this area is underappreciated, and could ultimately be worth $7 per share."
The stock also had a much higher volume than average on Friday, as it had reached more than 2 million by 2 p.m., compared to the average of 459,402.
TheStreet Ratings team rates PETROQUEST ENERGY INC as a "sell" with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PETROQUEST ENERGY INC (PQ) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, 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 debt-to-equity ratio is very high at 4.35 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, PQ maintains a poor quick ratio of 0.78, which illustrates the inability to avoid short-term cash problems.
- Net operating cash flow has significantly decreased to $12.29 million or 51.61% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, PETROQUEST ENERGY INC has marginally lower results.
- PQ has underperformed the S&P 500 Index, declining 19.45% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- 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, PETROQUEST ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- PETROQUEST ENERGY INC 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, PETROQUEST ENERGY INC swung to a loss, reporting -$2.20 versus $0.08 in the prior year. This year, the market expects an improvement in earnings ($0.21 versus -$2.20).
- You can view the full analysis from the report here: PQ Ratings Report