NEW YORK (TheStreet) -- Shares of Nabors Industries Ltd. (NBR - Get Report) are up by 5.47% to $14.84 in late afternoon trading on Monday, as some stocks within the energy sector surge due to the rise in oil prices.
Oil is in the green today as concerns regarding an increase in oil exports out of Iran start to fade as any rise in oil exports out of the Middle Eastern nation are not likely to take place until next year.
Crude oil is gaining by 5.78% to $51.98 per barrel and Brent crude is advancing by 5.28% to $57.85 per barrel this afternoon, according to the CNBC.com index.
Oil prices fell last Thursday after Iran reached a preliminary deal regarding its nuclear program with the U.S. and five other world powers.
The deal prompted concerns that Iran would increase its oil supply, but analysts say a rise in exports could take months and is likely not to occur before next year, Reuters reports.
"While clearly a bearish headline, a final deal and full lifting of sanctions still faces a number of obstacles," Morgan Stanley (MS) analysts said in a note, Reuters added.
Also helping oil prices rise is Saudi Arabia increasing its prices for crude sales in Asia for the second month, which has signaled an improvement in demand in the region, Reuters said.
Separately, TheStreet Ratings team rates NABORS INDUSTRIES LTD as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate NABORS INDUSTRIES LTD (NBR) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Energy Equipment & Services industry. The net income has significantly decreased by 688.7% when compared to the same quarter one year ago, falling from $151.35 million to -$891.07 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Energy Equipment & Services industry and the overall market, NABORS INDUSTRIES LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for NABORS INDUSTRIES LTD is currently lower than what is desirable, coming in at 33.02%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -49.95% is significantly below that of the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 42.91%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 828.57% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- NABORS INDUSTRIES LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, NABORS INDUSTRIES LTD swung to a loss, reporting -$2.35 versus $0.51 in the prior year. This year, the market expects an improvement in earnings (-$0.29 versus -$2.35).
- You can view the full analysis from the report here: NBR Ratings Report