NEW YORK (TheStreet) -- ConocoPhillips (COP) shares are down -2% to $70.12 in trading on Thursday.
ConocoPhillips reaffirmed its intention to consistently deliver 3%-5% compound annual growth in production and margins, while also delivering annual double digit returns to shareholders during its analyst meeting held at the New York Stock Exchange Thursday morning.
"Beginning this year, we will be growing production and margins across our diverse asset base," said CEO Ryan Lance. "We believe we have the asset base, technical capability, world-class workforce and financial strength to deliver on our unique value proposition."
The company also raised estimates for its Eagle Ford reserves by 39% to 2.5 billion barrels from 1.8 billion barrels.
"ConocoPhillips' wells in the Eagle Ford have the highest oil rates per well and are leading the industry in value. This is attributable not only to the fact that we are in the best part of the play, but also to our relentless focus on technical innovation and drilling and completion cost efficiencies," Lance said
TheStreet Ratings team rates CONOCOPHILLIPS as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate CONOCOPHILLIPS (COP) a BUY. This is driven by a number of 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 increase in net income, attractive valuation levels, expanding profit margins, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
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 74.4% when compared to the same quarter one year prior, rising from $1,426.00 million to $2,487.00 million.
- 38.26% is the gross profit margin for CONOCOPHILLIPS which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 18.76% significantly outperformed against the industry average.
- Net operating cash flow has slightly increased to $3,911.00 million or 1.05% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -23.34%.
- The current debt-to-equity ratio, 0.42, 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 0.99 is somewhat weak and could be cause for future problems.
- You can view the full analysis from the report here: COP Ratings Report