NEW YORK (TheStreet) -- Shares of independent oil and gas exploration company Denbury Resources (DNR) fell 4.22% to $7.39 in afternoon trading Monday after some bearish remarks on oil prices by the Organization of the Petroleum Exporting Countries (OPEC).
OPEC said in a draft report that oil prices would remain below $100 per barrel until at least 2025 according to the Wall Street Journal. The organization's most optimistic scenario predicts that oil would sell at approximately $76 a barrel a decade from now, the report states.
On the more pessimistic side, OPEC, which represents 12 nations that produce oil, cautioned that crude oil could cost as little as $45 a barrel in 2025.
"$100 is not in any of the scenarios," a delegate remarked at an OPEC presentation last week in Vienna, according to the Journal.
Separately, TheStreet Ratings team rates DENBURY RESOURCES INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate DENBURY RESOURCES INC (DNR) 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 reasonable valuation levels and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Along with the very weak revenue results, DNR underperformed when compared to the industry average of 37.8%. Since the same quarter one year prior, revenues plummeted by 52.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 55.96%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 282.35% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 284.8% when compared to the same quarter one year ago, falling from $58.31 million to -$107.75 million.
- You can view the full analysis from the report here: DNR Ratings Report