NEW YORK (TheStreet) -- Shares of Suncor Energy Inc. (SU) are down by 4.91% to $28.26 in mid-afternoon trading on Wednesday, as energy stocks continue to dive on the decline in oil prices, due to the U.S government's report of a surprise increase in inventory, and OPEC's report that it cut its 2015 demand expectations, MarketWatch reports.
Brent crude is down 4.44% to $63.87 this afternoon.
Oil is down as the U.S. government reports a surprising increase in inventory, which is adding to concerns regarding the imbalance in supply and demand, MarketWatch added.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
The U.S. Energy Information Administration said oil inventories grew by 1.5 million barrels, while analysts were expecting a decline of 3 million barrels, MarketWatch said.
Additionally, today OPEC reported that it slashed its 2015 demand forecast to its lowest level in 12 years.
OPEC lowered its estimates by almost 300,000 barrels per day, to 28.9 million barrels per day.
Separately, TheStreet Ratings team rates SUNCOR ENERGY INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate SUNCOR ENERGY INC (SU) a BUY. This is driven by multiple strengths, 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 largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SU's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.05, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has increased to $2,905.00 million or 15.27% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -1.72%.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.3%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- SUNCOR ENERGY INC's earnings per share declined by 45.1% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, SUNCOR ENERGY INC increased its bottom line by earning $2.59 versus $1.74 in the prior year.
- You can view the full analysis from the report here: SU Ratings Report