NEW YORK (TheStreet) -- Helmerich & Payne (HP) shares are up 1.8% to $102.87 on Thursday after analysts at Argus upgraded the energy company to "buy" from "hold" while maintaining their $124 price target.
The firm's price target represents a potential upside of 20.5% from the stock's current price.
TheStreet Ratings team rates HELMERICH & PAYNE as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate HELMERICH & PAYNE (HP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, HP's share price has jumped by 60.50%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 20.4%. Since the same quarter one year prior, revenues rose by 13.3%. 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.
- HP's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.50, which clearly demonstrates the ability to cover short-term cash needs.
- 45.88% is the gross profit margin for HELMERICH & PAYNE which we consider to be strong. Regardless of HP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HP's net profit margin of 20.19% compares favorably to the industry average.
- HELMERICH & PAYNE's earnings per share declined by 24.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, HELMERICH & PAYNE increased its bottom line by earning $6.66 versus $5.27 in the prior year. For the next year, the market is expecting a contraction of 5.7% in earnings ($6.28 versus $6.66).
- You can view the full analysis from the report here: HP Ratings Report
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