NEW YORK (TheStreet) -- Bill Barrett Corp. (BBG), an independent energy company that develops, acquires and explores for oil and natural gas resources, had its stock price target raised to $9 from $8 at Barclays which maintained its "equal weight" rating.
Despite the higher price target, the firm estimates that the company's outlook implies low to mid-single digit balance-sheet-adjusted production growth (BSAPG).
"Rising leverage ratios resulting from anticipated cash flow deficits and decreasing hedging gains remain a key consideration in shaping the capital program," Barclays analysts said.
Bill Barrett announced on Wednesday that it plans to accelerate its 2015 capital program to expand and accelerate its extended reach lateral drilling program in the Northeast Wattenberg area of the Denver Basin and is establishing an initial 2016 production growth range with capital expenditure guidance between $320 to $350 million.
Due to the timing of well completions under pad drilling, the incremental planned wells this year are not expected to have a significant impact on 2015 volumes, Barclays added.
Shares of Bill Barrett are declining 1.77% to $8.34 in afternoon trading Friday.
Separately, TheStreet Ratings team rates BILL BARRETT CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate BILL BARRETT CORP (BBG) a SELL. This is driven by a few notable weaknesses, 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 generally disappointing historical performance in the stock itself and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BBG's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 64.20%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
- Net operating cash flow has decreased to $53.83 million or 28.41% when compared to the same quarter last year. Despite a decrease in cash flow BILL BARRETT CORP is still fairing well by exceeding its industry average cash flow growth rate of -53.19%.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, BILL BARRETT CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for BILL BARRETT CORP is rather high; currently it is at 64.79%. Regardless of BBG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BBG's net profit margin of -23.92% significantly underperformed when compared to the industry average.
- BILL BARRETT CORP has improved earnings per share by 11.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, BILL BARRETT CORP turned its bottom line around by earning $0.30 versus -$4.06 in the prior year. For the next year, the market is expecting a contraction of 238.3% in earnings (-$0.42 versus $0.30).
- You can view the full analysis from the report here: BBG Ratings Report