NEW YORK (TheStreet) -- Shares of Statoil (STO) are up 0.69% to $27.78 in pre-market trade after BASF's (BASFY) oil and gas unit agreed to buy assets from the Norwegian company for $1.25 billion, diversifying energy supplies for Germany's biggest chemical maker as relations between Europe and Russia worsen, Bloomberg reports.
The Norwegian deal will make BASF, Germany's largest industrial user of gas, less reliant on supplies from Russia, Bloomberg added.
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TheStreet Ratings team rates STATOIL ASA as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate STATOIL ASA (STO) 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 solid stock price performance, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 163.63% and other important driving factors, this stock has surged by 28.25% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, STO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 175.1% when compared to the same quarter one year prior, rising from $678.28 million to $1,866.09 million.
- The current debt-to-equity ratio, 0.43, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.12, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has significantly increased by 153.19% to $2,739.71 million when compared to the same quarter last year. In addition, STATOIL ASA has also vastly surpassed the industry average cash flow growth rate of -5.22%.
- You can view the full analysis from the report here: STO Ratings Report