NEW YORK (TheStreet) -- Shares of Nabors Industries (NBR - Get Report) are up 3.71% to $12.87 in midday trading today, with oil increasing its gains as the Organization of the Petroleum Exporting Countries forecast greater demand for crude this year and projected less supply from countries outside the group.
Brent for March delivery increased 0.97% to $58.36 at 12:29 p.m. in New York. West Texas Intermediate was up 2.71% to $53.09.
The OPEC Reference Basket ended January down $15.08 or 25% to average $44.38 a barrel, reaching its lowest value in six years as excess supply and weak demand continued to weigh on the crude oil market, OPEC said.
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However, fueling improved sentiment, demand for OPEC crude is now projected at 29.2 mb/d in 2015, following an upward adjustment of 0.4 mb/d, the group said.
Additionally, non-OPEC oil supply is projected to grow by 0.85 mb/d this year, down 0.42 mb/d from the previous assessment, OPEC noted, adding that in January, OPEC crude production decreased by 53 tb/d to average 30.15 mb/d, according to secondary sources.
Separately, oilfield services provider C&J Energy Services (CJES) , which plans to buy Nabors Industries' production services business, said today that it has reached an agreement to reduce the cash portion of the deal by $250 to $688 million.
TheStreet Ratings team rates NABORS INDUSTRIES LTD as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate NABORS INDUSTRIES LTD (NBR) 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, compelling growth in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- NBR's revenue growth has slightly outpaced the industry average of 10.8%. Since the same quarter one year prior, revenues rose by 16.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- NABORS INDUSTRIES LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NABORS INDUSTRIES LTD reported lower earnings of $0.51 versus $0.80 in the prior year. This year, the market expects an improvement in earnings ($1.18 versus $0.51).
- The gross profit margin for NABORS INDUSTRIES LTD is currently lower than what is desirable, coming in at 34.83%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 5.84% is above that of the industry average.
- NBR has underperformed the S&P 500 Index, declining 24.84% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full analysis from the report here: NBR Ratings Report