Why YPF (YPF) Stock Is Up Today

NEW YORK (TheStreet) -- YPF (YPF) was gaining 6.5% to $30 Wednesday on news that Repsol (REPYY) sold nearly all of its stake in the Argentine company to Morgan Stanley (MS).

Morgan Stanley put the YPF stake in a block trade following the deal.

Repsol said it will make $622 million from the sale. Repsol will holds 0.5% of YPF, which it can';t sell due to ongoing legal proceedings in Argentina.

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TheStreet Ratings team rates YACIMIENTOS PETE FISCALES SA as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate YACIMIENTOS PETE FISCALES SA (YPF) 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 solid stock price performance, increase in net income and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and poor profit margins."

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 Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income increased by 28.4% when compared to the same quarter one year prior, rising from $180.50 million to $231.87 million.
  • Powered by its strong earnings growth of 28.26% and other important driving factors, this stock has surged by 112.54% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • YACIMIENTOS PETE FISCALES SA has improved earnings per share by 28.3% 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, YACIMIENTOS PETE FISCALES SA reported lower earnings of $2.01 versus $2.03 in the prior year. This year, the market expects an improvement in earnings ($2.89 versus $2.01).
  • Net operating cash flow has significantly decreased to $381.79 million or 54.96% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, YACIMIENTOS PETE FISCALES SA's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: YPF Ratings Report

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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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