Why Newfield Exploration (NFX) Stock Is Dropping Today

NEW YORK (TheStreet) -- Shares of Newfield Exploration Co. (NFX) are lower by -5.53% to $39.64 in early afternoon trading on Monday, as Brent crude prices drop below $100 for the first time in 14 months, Reuters reports.

In June, oil prices hit a high for the year above $115, but weak economic growth and a broad supply drove oil prices lower.

Saudi Arabia and other OPEC producers stated that they like to see oil prices remain over $100, as numbers below that figure will put pressure on exporters' budgets, and result in some producers pumping less as they attempt to aid the market, Reuters added.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Other oil and energy company stocks falling as a result include: Chesapeake Energy Corp. (CHK) . down -2.64% to $24.48, EXCO Resources Inc. (XCO) , lower by -2.41% to $4.46, and Goodrich Petroleum Corp. (GDP) , down by -3.10% to $20.03.

Separately, 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, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and generally higher debt management risk."

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

  • The revenue growth greatly exceeded the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 39.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $368.00 million or 46.61% when compared to the same quarter last year. In addition, NEWFIELD EXPLORATION CO has also vastly surpassed the industry average cash flow growth rate of -5.22%.
  • NEWFIELD EXPLORATION CO has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. 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 ($1.97 versus $0.79).
  • NFX's debt-to-equity ratio of 0.95 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. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.37 is very low and demonstrates very weak liquidity.
  • 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 119.8% when compared to the same quarter one year ago, falling from $111.00 million to -$22.00 million.
  • You can view the full analysis from the report here: NFX Ratings Report

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