WPX Energy (WPX) Stock Retreating Today on Lower Oil Prices

NEW YORK (TheStreet) -- Shares of WPX Energy Inc. (WPX) are lower by 6.32% to $12.01 in late afternoon trading on Thursday, as the energy sector falls due to the decline in oil prices.

Brent crude was down 0.53% to $69.55 per barrel on Thursday afternoon.

Oil prices fell today as Saudi Arabia cut the price of its oil in the U.S., which added to worries that it is more concerned with keeping market share than raising prices, the Wall Street Journal reports.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Saudi Aramco, a state run oil company, said on Thursday that it lowered its official selling price for all oil grades heading to Asia in January, between $1.50 per barrel and $1.90 per barrel. It also cut its prices for all crude grades to the U.S., between 10 cents and 90 cents per barrel, the Journal said.

Another possible factor contributing to the decline in oil prices is the comments made by Mario Draghi, the president of the European Central Bank, after the ECB announced its most recent policy decision, which is keeping its main interest rate unchanged, the Miami Herald reports.

Draghi didn't announce new stimulus, but suggested that the bank may act early next year. Draghi also said the ECB will be reassessing the success of its current stimulus program, as well as the impact of low oil prices on the European economy, the Herald added.

Other energy stocks falling today include Triangle Petroleum Corp. (TPLM) , down by 6.44% to $3.78, Kodiak Oil & Gas Corp. (KOG) , lower by 2.51% to $6.99, and Oasis Petroleum Inc. (OAS) , falling by 5.82% to $14.90 this afternoon.

Separately, TheStreet Ratings team rates WPX ENERGY INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate WPX ENERGY INC (WPX) 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, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself."

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

  • The revenue growth greatly exceeded the industry average of 6.4%. Since the same quarter one year prior, revenues rose by 28.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for WPX ENERGY INC is rather high; currently it is at 54.79%. It has increased significantly from the same period last year. Along with this, the net profit margin of 7.80% is above that of the industry average.
  • The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that WPX's debt-to-equity ratio is low, the quick ratio, which is currently 0.58, displays a potential problem in covering short-term cash needs.
  • WPX has underperformed the S&P 500 Index, declining 13.73% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, WPX ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: WPX Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

If you liked this article you might like

These 16 Stocks Look Ready to Reverse

These 16 Stocks Look Ready to Reverse

11 Stock Picks for the Coming Oil Breakout

11 Stock Picks for the Coming Oil Breakout

Billionaire Hedge Fund Manager Leon Cooperman Gave His Top 5 Cheap Stocks
Mark Fisher Says Natural Gas Could Break Out Above $5

Mark Fisher Says Natural Gas Could Break Out Above $5

Steve Cohen's Point72 Takes Stake in Struggling Electronics Retailer Conn's