Why PetroChina (PTR) Stock Closed Higher Today

NEW YORK (TheStreet) -- Shares of PetroChina Co. (PTR) closed up 1.81% to $144.37 today after it was earlier reported that China's biggest energy companies stand to benefit from Russian President Putin's offer to sell a stake in the country's second-biggest oil project to "Chinese friends," Bloomberg reported.

"It's a huge opportunity for Chinese oil companies such as Sinopec (SNP) and PetroChina to get into upstream in Russia," said Simon Powell, head of oil and gas research as CLSA Ltd. in Hong Kong, referring to exploration and production, according to Bloomberg. "PetroChina and Sinopec have a lot of free cash and it's just across the border."

Russia is turning to China to spur its economy as relations sour with the U.S. and Europe over the Ukraine crisis, Bloomberg noted.

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TheStreet Ratings team rates PETROCHINA CO LTD as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate PETROCHINA CO LTD (PTR) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."

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

  • The revenue growth came in higher than the industry average of 3.5%. Since the same quarter one year prior, revenues slightly increased by 9.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 31.87% 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, PTR should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • PETROCHINA CO LTD has improved earnings per share by 11.6% 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 two years. We feel that this trend should continue. During the past fiscal year, PETROCHINA CO LTD increased its bottom line by earning $11.70 versus $10.11 in the prior year. This year, the market expects an improvement in earnings ($11.77 versus $11.70).
  • Net operating cash flow has increased to $18,209.64 million or 31.22% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.36%.
  • You can view the full analysis from the report here: PTR Ratings Report
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