WTI crude oil for February delivery was falling 4% to $46.45 a barrel Monday morning, and Brent crude oil for February delivery was falling 4% to $48.12 a barrel. Oil prices have fallen for seven straight weeks and are approaching their lowest levels since April 2009, according to Reuters.
Goldman Sachs analysts lowered their three month forecasts for WTI crude oil to $41 a barrel from $70, and to $42 a barrel from $80 for Brent. The fim lowered its 2015 forecast for WTI to $47.15 a barrel from $73.75, and to $50.40 a barrel from $83.75 for Brent as prices continue to decline.
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"To keep all capital sidelined and curtail investment in shale until the market has rebalanced, we believe prices need to stay lower for longer," Goldman Sachs analysts told Reuters. Increased production in U.S. shale oil is a driver for the recent decline in oil prices.
TheStreet Ratings team rates CONTINENTAL RESOURCES INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CONTINENTAL RESOURCES INC (CLR) 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 robust revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CLR's very impressive revenue growth greatly exceeded the industry average of 6.6%. Since the same quarter one year prior, revenues leaped by 101.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CONTINENTAL RESOURCES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CONTINENTAL RESOURCES INC increased its bottom line by earning $2.07 versus $2.03 in the prior year. This year, the market expects an improvement in earnings ($2.81 versus $2.07).
- 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, CONTINENTAL RESOURCES INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The debt-to-equity ratio of 1.20 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, CLR maintains a poor quick ratio of 0.75, which illustrates the inability to avoid short-term cash problems.
- You can view the full analysis from the report here: CLR Ratings Report