The firm said it raised its rating on the independent natural gas and oil exploration and production company, as it believes WPX Energy's new CEO is turning the business around.
Howard Weil set a $32 price target on the stock.
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Separately, TheStreet Ratings team rates WPX ENERGY INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate WPX ENERGY INC (WPX) 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, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, WPX's share price has jumped by 34.02%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- Net operating cash flow has significantly increased by 118.05% to $314.00 million when compared to the same quarter last year. In addition, WPX ENERGY INC has also vastly surpassed the industry average cash flow growth rate of -6.15%.
- The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that WPX's debt-to-equity ratio is low, the quick ratio, which is currently 0.65, displays a potential problem in covering short-term cash needs.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 850.0% when compared to the same quarter one year ago, falling from $18.00 million to -$135.00 million.
- 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, WPX 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: WPX Ratings Report
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