Will Hess (HES) Stock React Today to Portfolio Update at 'Investor Day'?

NEW YORK (TheStreet) -- Hess Corp. (HES)  reviewed its growth strategy and provided a detailed update on its portfolio at an "Investor Day" in Houston yesterday.

The global integrated energy company said it is increasing its five-year production growth rate forecast to 6%-10%.

With the success of its 2014 downspacing pilots confirmed, the company said it is increasing its Bakken net peak production guidance to approximately 175,000 barrels of oil equivalent per day (BOEPD) by 2020, adding an additional 1,000 well locations to a total of more than 4,000, and increasing its net estimated ultimate recovery (EUR) to more than 1.4 BBOE.

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Hess also provided guidance for the first time on its asset Utica, with net peak production forecast to reach approximately 40,000 BOEPD by 2020, with approximately 500 well locations and a net EUR of more than 300 MMBOE.

Shares of Hess are down 0.79% to $83.15. 

Separately, TheStreet Ratings team rates HESS CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate HESS CORP (HES) a BUY. This is driven by some important positives, 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 compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

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

  • 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 140.0% when compared to the same quarter one year prior, rising from $420.00 million to $1,008.00 million.
  • HES's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • The gross profit margin for HESS CORP is rather high; currently it is at 63.46%. It has increased significantly from the same period last year. Along with this, the net profit margin of 36.72% significantly outperformed against the industry average.
  • Net operating cash flow has slightly increased to $1,338.00 million or 6.69% when compared to the same quarter last year. In addition, HESS CORP has also modestly surpassed the industry average cash flow growth rate of -2.53%.
  • You can view the full analysis from the report here: HES Ratings Report

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