Story updated at 10 a.m. to reflect market activity.
Shares of Newfield gained 2.7% to $32.26 in morning trading.
The firm set a price target of $37 for the company. The upgrade is due to SCOOP and STAK plays driving the improvement of Newfield's portfolio according to UBS analysts.
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Separately, TheStreet Ratings team rates NEWFIELD EXPLORATION CO as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate NEWFIELD EXPLORATION CO (NFX) 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 robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 7.9%. Since the same quarter one year prior, revenues rose by 41.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- NEWFIELD EXPLORATION CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, NEWFIELD EXPLORATION CO turned its bottom line around by earning $0.80 versus -$6.70 in the prior year. This year, the market expects an improvement in earnings ($1.88 versus $0.80).
- The gross profit margin for NEWFIELD EXPLORATION CO is currently very high, coming in at 73.49%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 3.41% trails the industry average.
- 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, NEWFIELD EXPLORATION CO's return on equity significantly trails that of both the industry average and the S&P 500.
- The debt-to-equity ratio of 1.25 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, NFX has a quick ratio of 0.51, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- You can view the full analysis from the report here: NFX Ratings Report