NEW YORK (TheStreet) -- Helmerich & Payne (HP) stock has been downgraded to "market perform" from "outperform," FBR Capital Markets said Monday. The firm said the revision was a valuation call based on a $120 price target.
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Separately, TheStreet Ratings team rates HELMERICH & PAYNE as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate HELMERICH & PAYNE (HP) 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 solid stock price performance, revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 83.67% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.2%. Since the same quarter one year prior, revenues slightly increased by 6.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- HP's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.76, which clearly demonstrates the ability to cover short-term cash needs.
- 46.26% is the gross profit margin for HELMERICH & PAYNE which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.53% is above that of the industry average.
- Net operating cash flow has significantly increased by 54.30% to $235.15 million when compared to the same quarter last year. In addition, HELMERICH & PAYNE has also modestly surpassed the industry average cash flow growth rate of 49.55%.
- You can view the full analysis from the report here: HP Ratings Report