Why Newfield Exploration (NFX) Stock Is Up Today

NEW YORK (TheStreet) -- Newfield Exploration (NFX) was gaining 2.3% to $43.65 Thursday after raising its full-year 2014 production guidance.

The company now expects to produce 46.5 million to 48.5 million barrels of oil equivalent in 2014, up from its previous guidance of 44 million to 48 million Boe. Newfield said it produced 12.1 million Boe in the second quarter, about its guidance of 10.7 million to 11.3 million Boe.

Newfield also increased its 2014 domestic capital budget by about $100 million to $1.7 billion due to improved drilling performance across the company and new acreage in the Anadarko Basin.

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TheStreet Ratings team rates NEWFIELD EXPLORATION CO as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate NEWFIELD EXPLORATION CO (NFX) 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 robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 49.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • NEWFIELD EXPLORATION CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, NEWFIELD EXPLORATION CO turned its bottom line around by earning $0.79 versus -$6.70 in the prior year. This year, the market expects an improvement in earnings ($2.03 versus $0.79).
  • Net operating cash flow has slightly increased to $365.00 million or 1.67% when compared to the same quarter last year. Despite an increase in cash flow, NEWFIELD EXPLORATION CO's cash flow growth rate is still lower than the industry average growth rate of 17.51%.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, NEWFIELD EXPLORATION CO's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • NFX's debt-to-equity ratio of 0.94 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. Despite the fact that NFX's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.54 is low and demonstrates weak liquidity.
  • You can view the full analysis from the report here: NFX Ratings Report

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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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