Why Noble Energy (NBL) Stock Is Down

NEW YORK (TheStreet) -- Shares of Noble Energy Inc.  (NBL) are down -2.29% to $67.75 in pre-market trade after Woodside Petroleum Ltd. (WOPEF) dropped an agreement to buy a quarter of Israel's largest natural gas field for up to $2.6 billion after talks to complete the deal collapsed, Bloomberg reports.

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TheStreet Ratings team rates NOBLE ENERGY INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate NOBLE ENERGY INC (NBL) 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, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. 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 revenue growth came in higher than the industry average of 3.3%. Since the same quarter one year prior, revenues rose by 22.4%. 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 $929.00 million or 31.77% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 18.91%.
  • The gross profit margin for NOBLE ENERGY INC is currently very high, coming in at 74.68%. Regardless of NBL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NBL's net profit margin of 15.07% compares favorably to the industry average.
  • Despite currently having a low debt-to-equity ratio of 0.56, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.01 is sturdy.
  • NOBLE ENERGY INC's earnings per share declined by 14.1% 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 year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, NOBLE ENERGY INC reported lower earnings of $2.49 versus $2.67 in the prior year. This year, the market expects an improvement in earnings ($3.25 versus $2.49).
  • You can view the full analysis from the report here: NBL Ratings Report

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