NEW YORK (TheStreet) -- Shares of Southwestern Energy Co. (SWN) are up 4.12% to 34.08 today after Imperial Capital initiated coverage of the independent energy company with an "outperform" rating and a one-year price target of $50.
Sustained growth and low costs will energize the stock, Imperial Capital analysts said, who set a price target almost 50% above the recent share price.
"We believe Southwestern is capable of sustained 15% per annum growth in U.S. natural-gas output the next few years" analyst said, adding "Southwestern should also remain one of the lowest-cost producers in the U.S. and will potentially benefit from serving rising U.S. natural-gas demand and in taking market share in the midst of a major step up in U.S. demand that we see as likely in the 2016-2017 period."
Separately, TheStreet Ratings team rates SOUTHWESTERN ENERGY CO as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate SOUTHWESTERN ENERGY CO (SWN) 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, growth in earnings per share and good cash flow from operations. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SWN's revenue growth has slightly outpaced the industry average of 1.9%. Since the same quarter one year prior, revenues slightly increased by 6.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- SOUTHWESTERN ENERGY CO has improved earnings per share by 13.2% 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. This trend suggests that the performance of the business is improving. During the past fiscal year, SOUTHWESTERN ENERGY CO turned its bottom line around by earning $2.00 versus -$2.03 in the prior year. This year, the market expects an improvement in earnings ($2.30 versus $2.00).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Oil, Gas & Consumable Fuels industry average. The net income increased by 13.5% when compared to the same quarter one year prior, going from $185.87 million to $211.00 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, SOUTHWESTERN ENERGY CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- SWN has underperformed the S&P 500 Index, declining 16.04% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- You can view the full analysis from the report here: SWN Ratings Report