NEW YORK (TheStreet) -- Shares of Encana Corp. (ECA) fell to a 52-week low of $12.50, as U.S. crude oil futures fell below $60 a barrel for the first time in five years on oversupply concerns, CNBC reports.
Deutsche Bank maintained its "buy" rating on the oil and gas company in its 2015 E&P outlook, while slightly lowering its price target to C$26 from C$27.
"Under new management, ECA has undergone a significant transformation with divestitures of mature gas assets to fund major Eagle Ford and Permian acquisitions. With the portfolio moves largely completed, ECA can now provide a view on the trajectory of production growth," analysts said.
"With the assets in place, we see a positive liquids mix shift towards oil and away from NGLs, which will improve BOE margins, and in turn capital efficiency," analysts added.
WTI crude was down 2.26% to $59.56 per barrel as of 4:08 p.m. in New York.
Brent and West Texas Intermediate traded near the lowest price since July 2009, as Saudi Arabia questioned the need to cut output, bolstering speculation that OPEC's biggest producer will defend market share.
Traders warned that a bottom for crude oil remained elusive after a six month selloff, CNBC added.
Separately, TheStreet Ratings team rates ENCANA CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ENCANA CORP (ECA) 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ECA's very impressive revenue growth greatly exceeded the industry average of 6.3%. Since the same quarter one year prior, revenues leaped by 64.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.69, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ENCANA CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- The gross profit margin for ENCANA CORP is rather high; currently it is at 54.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 122.84% significantly outperformed against the industry average.
- You can view the full analysis from the report here: ECA Ratings Report