NEW YORK (TheStreet) -- Shares of Nabors Industries Ltd. (NBR) are falling by 4.43% to $16.84 after West Texas Intermediate crude slid 2.6% to $76.76 a barrel this afternoon in New York, after reaching as low as $75.84, Bloomberg reports.
Stock of the land drilling contractor is sliding along with other firms linked to the oil and gas industry.
Almost the entire sector is in a bear market, or has seen stock prices fall at least 20%, over the past couple of months, according to Business Insider.
"Crude oil markets have moved rapidly into surplus, not because of the growth in new production from the U.S. and other, but equally importantly because of the rapid collapse of demand. As a result, there is an emerging surplus that should weigh heavily on prices through next year," Citigroup analyst Ed Morse explained in a note.
Separately, TheStreet Ratings team rates NABORS INDUSTRIES LTD as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate NABORS INDUSTRIES LTD (NBR) 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 revenue growth, compelling growth in net income and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including poor profit margins and relatively poor performance when compared with the S&P 500 during the past year."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- NBR's revenue growth has slightly outpaced the industry average of 12.7%. Since the same quarter one year prior, revenues rose by 16.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 158.3% when compared to the same quarter one year prior, rising from -$104.63 million to $61.04 million.
- NABORS INDUSTRIES LTD reported significant earnings per share improvement in the most recent quarter compared to 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, NABORS INDUSTRIES LTD reported lower earnings of $0.51 versus $0.80 in the prior year. This year, the market expects an improvement in earnings ($1.20 versus $0.51).
- In its most recent trading session, NBR has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- The gross profit margin for NABORS INDUSTRIES LTD is currently lower than what is desirable, coming in at 34.83%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.36% significantly trails the industry average.
- You can view the full analysis from the report here: NBR Ratings Report