Will This Analyst Downgrade Hurt Continental Resources (CLR) Stock Today? (Update)

Update (9:41 a.m.): Updated with Tuesday market open information.

NEW YORK (TheStreet) -- Societe Generale downgraded Continental Resources  (CLR) to "hold" from "buy." The firm cited valuation based on a $143 price target.

The stock was down 0.46% to $135.58 at 9:40 a.m. on Tuesday.

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Separately, TheStreet Ratings team rates CONTINENTAL RESOURCES INC as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CONTINENTAL RESOURCES INC (CLR) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 0.2%. Since the same quarter one year prior, revenues rose by 19.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $584.84 million or 20.79% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 5.61%.
  • The gross profit margin for CONTINENTAL RESOURCES INC is currently very high, coming in at 79.13%. Regardless of CLR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CLR's net profit margin of 16.19% significantly outperformed against the industry.
  • Compared to its closing price of one year ago, CLR's share price has jumped by 73.11%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • CONTINENTAL RESOURCES INC's earnings per share declined by 39.5% 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, CONTINENTAL RESOURCES INC increased its bottom line by earning $4.14 versus $4.06 in the prior year. This year, the market expects an improvement in earnings ($7.01 versus $4.14).
  • You can view the full analysis from the report here: CLR Ratings Report

STOCKS TO BUY: TheStreet's Stocks Under $10 has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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