NEW YORK (TheStreet) -- Shares of oil driller Nabors Industries (NBR - Get Report) fell 6.04% to $12.06 in morning trading Tuesday as oil prices declined following Monday's rally after cautionary statements from the International Energy Agency.
Oil prices rose Monday after the Organization of Petroleum Exporting Countries increased its 2015 forecast. OPEC said in its monthly report that oil demand growth had "yet to show any signs of accelerating," but the organization still raised its 2015 outlook and predicted low oil prices would increase sales later this year.
OPEC predicted demand for its crude oil would increase to average approximately 29.21 million barrels per day (bpd) in 2015, up approximately 430,000 from its previous estimate.
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But the International Energy Agency cautioned Tuesday that more selloffs could occur in the near term as stocks continue to climb. Oil stockpiles in member nations of the Organization for Economic Cooperation and Development could hit a record high of 2.83 billion barrels by mid-2015, the IEA said, according to Reuters.
The IEA counsels Western nations on energy policy.
WTI crude was down 3.44% to $51.04 at 10:59 a.m., while Brent crude was down 1.61% to $57.40, according to CNBC.
Separately, 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