NEW YORK (TheStreet) -- Swift Energy (SFY) shares were downgraded to "market perform" from "outperform" by analysts at Wells Fargo (WFC) on Friday while also lowering its price target range to $11-$13 from $14-$17.
Shares are down -2.33% to $10.88 in early market trading on Friday.
Must Read: Warren Buffett's 25 Favorite Stocks
The firm believes that the energy company needs to sell off more of its assets to provide flexibility in 2015.
"While the company has its CLATEX assets on the market, continued delays and a disjointed package of assets leave us thinking that either the deal won't get done, or only parts of it will. Either way, the company may be forced to first shrink to grow and the remaining inventory remains mostly gassy, as liquids locations are drilled up," said analyst David Tameron.
Separately, TheStreet Ratings team rates SWIFT ENERGY CO as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SWIFT ENERGY CO (SFY) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, generally disappointing historical performance in the stock itself, deteriorating net income and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio of 1.13 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.45, which clearly demonstrates the inability to cover short-term cash needs.
- 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 Oil, Gas & Consumable Fuels industry and the overall market, SWIFT ENERGY CO's return on equity significantly trails that of both the industry average and the S&P 500.
- The share price of SWIFT ENERGY CO has not done very well: it is down 22.10% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 24.9% when compared to the same quarter one year ago, dropping from $7.21 million to $5.41 million.
- SWIFT ENERGY CO's earnings per share declined by 29.4% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SWIFT ENERGY CO swung to a loss, reporting -$0.44 versus $0.48 in the prior year. This year, the market expects an improvement in earnings ($0.23 versus -$0.44).
- You can view the full analysis from the report here: SFY Ratings Report