WTI crude oil prices were falling 3.8% to $63.31 as of 11:53 a.m. Monday, and Brent crude oil prices were falling 4.2% to $66.14, the lowest prices since October 2009.
The new low continues recent declines in oil futures. Oil prices fell late last week after European Central Bank president Mario Draghi said the bank will not change its rates, according to Business Insider. Draghi said that lower oil prices were "unambiguously positive" during the press conference, which may have put pressure on oil prices.
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OPEC also recently announced that it will no lower its oil production targets of 30 million barrels a day, which helped contribute to recent declines in oil prices.
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 6.3%. 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's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 34.94%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- 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