Story updated at 10 a.m. to reflect market activity.
NEW YORK (TheStreet) -- Nabors Industries NBR was downgraded to "market perform" from "outperform" by Bernstein Tuesday.
Nabors fell -1.3% to $25.44 in morning trading.
The analyst firm set a price target of $25 for the oil and gas company. Bernstein analysts said Nabors is exiting value territory, and that material positive revisions are now required.
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Separately, TheStreet Ratings team rates NABORS INDUSTRIES LTD as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate NABORS INDUSTRIES LTD (NBR) 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 revenue growth, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. 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:
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.6%. Since the same quarter one year prior, revenues slightly increased by 3.5%. 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.
- Compared to its closing price of one year ago, NBR's share price has jumped by 59.91%, 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.
- NABORS INDUSTRIES LTD's earnings per share declined by 48.4% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, NABORS INDUSTRIES LTD reported lower earnings of $0.49 versus $0.80 in the prior year. This year, the market expects an improvement in earnings ($1.15 versus $0.49).
- NBR's debt-to-equity ratio of 0.63 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further.
- 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. Compared to other companies in the Energy Equipment & Services industry and the overall market, NABORS INDUSTRIES LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: NBR Ratings Report