NEW YORK (TheStreet) -- Shares of Talisman Energy Inc. (TLM) continue to surge today, up 12.69% to $11.10 on very heavy trading volume this afternoon, after the company said that Spain's Repsol (REPYY) approached them about potential deals.
However, the oil producer would not say how advanced the talks are, or if they have involved buying specific Talisman assets or the entire company, the Globe and Mail reports.
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TheStreet Ratings team rates TALISMAN ENERGY INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate TALISMAN ENERGY INC (TLM) 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 revenue growth, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.4%. Since the same quarter one year prior, revenues rose by 17.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The gross profit margin for TALISMAN ENERGY INC is currently very high, coming in at 70.63%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 38.15% significantly outperformed against the industry average.
- The current debt-to-equity ratio, 0.52, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.71 is somewhat weak and could be cause for future problems.
- TLM has underperformed the S&P 500 Index, declining 13.64% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- 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, TALISMAN ENERGY INC'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: TLM Ratings Report