Will This Analyst Downgrade Hurt Bill Barrett (BBG) Stock Today?

NEW YORK (TheStreet) -- Mizuho downgraded Bill Barrett  (BBG) to "neutral" from "buy" and set a $28 price target based on valuation, as the stock is up 20% over the past six weeks.

The stock closed at $28.60 on Wednesday.

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Separately, TheStreet Ratings team rates BILL BARRETT CORP as a "hold" with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate BILL BARRETT CORP (BBG) 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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and disappointing return on equity."

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 S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 61.5% when compared to the same quarter one year prior, rising from -$33.15 million to -$12.75 million.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • Net operating cash flow has increased to $75.19 million or 12.35% when compared to the same quarter last year. Despite an increase in cash flow, BILL BARRETT CORP's average is still marginally south of the industry average growth rate of 17.38%.
  • The debt-to-equity ratio of 1.05 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, BBG has a quick ratio of 0.67, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, BILL BARRETT CORP'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: BBG Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings 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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