NEW YORK (TheStreet) -- Oasis Petroleum (OAS) shares are down 1.74% to $17.17 in afternoon trading despite analysts at Simmons upgrading the company's stock to "overweight" from "neutral" as falling oil prices caused oil stocks to decline today.
The stock has a mean price target of $18.89, according to 31 different ratings firms, with a price target high of $27 and a low of $7.50.
Oil futures are declining today as the supply of oil on the global market continues to remain stubbornly high and the dollar gains in trading.
Industry standard Brent crude for July delivery is down 1.08%, or 71 cents, to $64.99 per barrel, while West Texas crude for July delivery is down 1.2%, or 74 cents, to $60.69 per barrel.
The International Energy Agency said that global supplies will exceed demand for the remainder of the year as U.S. oil output reached 9.6 million barrels a day last week, its highest output level in over 40 years, according to the Wall Street Journal.
TheStreet Ratings team rates OASIS PETROLEUM INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate OASIS PETROLEUM INC (OAS) 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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for OASIS PETROLEUM INC is rather high; currently it is at 63.38%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, OAS's net profit margin of -10.00% significantly underperformed when compared to the industry average.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, OASIS PETROLEUM INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- 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 110.6% when compared to the same quarter one year ago, falling from $169.95 million to -$18.04 million.
- You can view the full analysis from the report here: OAS Ratings Report