NEW YORK (TheStreet) -- BP (BP) shares are up 0.26% to $41.94 in afternoon trading on Thursday as it nears a bid for oil company Penn Virginia Company (PVA), according to U.K. new service Proactive Investors.
BP offered to acquire the company for $8 per share, according to the report, which rejected the offer because it believes that that purchase price undervalues the company.
Penn Virginia is looking for at least $10 per share.
Penn Virginia shares have decreased by more than 75% over the past 12 months as falling oil prices forced the stock down to its opening trading price of $4.50 today, well below last June's price of $17.
The company has responded to the report by saying that it has no comment on market rumors.
Penn Virginia shares spiked 9.88% to $4.90 in trading today following the report.
Fellow oil giants Exxon Mobil (XOM) and Chevron (CVX) are both declining as fell in trading today.
TheStreet Ratings team rates BP PLC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate BP PLC (BP) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The current debt-to-equity ratio, 0.52, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.03, which illustrates the ability to avoid short-term cash problems.
- BP PLC's earnings per share declined by 25.4% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, BP PLC reported lower earnings of $1.21 versus $7.34 in the prior year. This year, the market expects an improvement in earnings ($2.36 versus $1.21).
- BP, with its decline in revenue, slightly underperformed the industry average of 38.7%. Since the same quarter one year prior, revenues fell by 40.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for BP PLC is rather low; currently it is at 17.01%. Regardless of BP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.80% trails the industry average.
- The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has significantly decreased by 26.2% when compared to the same quarter one year ago, falling from $3,528.00 million to $2,602.00 million.
- You can view the full analysis from the report here: BP Ratings Report