NEW YORK (TheStreet) -- Shares of Whiting Petroleum (WLL) are plunging, sharply down 13.48% to $32.23 on heavy trading volume Monday afternoon, as oil prices hit a five-year low after analysts at Morgan Stanley cut their 2015 forecast for Brent crude this morning, CNBC reports.
The firm cited oversupply, and said crude prices could fall to as little as $53 per barrel in 2015, although its base case scenario was for $70, lower than its earlier estimate of $98.
Crude prices have fallen by about 40% percent since June, as Brent futures are down 4.04% to $66.28 today -- its lowest level since October 2009.
Must Read: Warren Buffett's 25 Favorite Stocks
Last week, the Organization of the Petroleum Exporting Countries said it it would maintain its oil production target of 30 million barrels a day, instead of cutting production to increase prices, Bloomberg reported.
OPEC's decision means that oil will remain oversupplied through the beginning of 2015, and prices could remain low for longer than expected, the Wall Street Journal reported.
Additionally, Whiting Petroleum announced that it has completed its acquisition of Kodiak Oil & Gas.
Separately, TheStreet Ratings team rates WHITING PETROLEUM CORP as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate WHITING PETROLEUM CORP (WLL) 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, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 6.3%. Since the same quarter one year prior, revenues rose by 13.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.65, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that WLL'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.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has decreased by 22.6% when compared to the same quarter one year ago, dropping from $204.10 million to $157.98 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, WHITING PETROLEUM CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: WLL Ratings Report