Story updated at 10 a.m. to reflect market activity.
Cabot fell 3.1% to $33.02 in morning trading.
The firm said a fair value for the stock is between $36 and $38 a share. Cabot will likely miss its 2014 cash flow expectations according to Stifel Nicolaus analysts.
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Separately, TheStreet Ratings team rates CABOT OIL & GAS CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate CABOT OIL & GAS CORP (COG) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 7.8%. Since the same quarter one year prior, revenues rose by 31.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CABOT OIL & GAS CORP 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 two years. We feel that this trend should continue. During the past fiscal year, CABOT OIL & GAS CORP increased its bottom line by earning $0.67 versus $0.31 in the prior year. This year, the market expects an improvement in earnings ($1.21 versus $0.67).
- 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 90.7% when compared to the same quarter one year prior, rising from $40.87 million to $77.95 million.
- Net operating cash flow has increased to $257.85 million or 30.90% when compared to the same quarter last year. In addition, CABOT OIL & GAS CORP has also vastly surpassed the industry average cash flow growth rate of -23.34%.
- The gross profit margin for CABOT OIL & GAS CORP is currently very high, coming in at 74.02%. Regardless of COG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, COG's net profit margin of 15.99% significantly outperformed against the industry.
- You can view the full analysis from the report here: COG Ratings Report