Royal Dutch Shell (RDS.A) Stock Trading in the Red Amid Lower Oil Prices

NEW YORK (TheStreet) -- Shares of Royal Dutch Shell  (RDS.A) were trading lower by 2.11% to $57.96 in afternoon trading Monday, as both WTI and Brent crude prices slip to trade in negative territory, hitting three week low levels.

Oil prices were lower amid the situation in Greece, causing investors to flee from riskier assets, according to Reuters.

U.S. crude for August delivery was down 2.23% to $58.30 a barrel as of 2:29 p.m. ET today, after reaching its lowest level since June 8.

Brent crude was down 2.02% to $61.98 a barrel after hitting its lowest level since May 28 of $61.35 a barrel earlier in the session.

U.K.-based Shell is an independent oil and gas company, operating in three segments including upstream, downstream and corporate.

Separately, TheStreet Ratings team rates ROYAL DUTCH SHELL PLC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate ROYAL DUTCH SHELL PLC (RDS.A) a BUY. This is driven by a number of 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. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. 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:

  • RDS.A's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.90 is somewhat weak and could be cause for future problems.
  • ROYAL DUTCH SHELL PLC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, ROYAL DUTCH SHELL PLC reported lower earnings of $4.70 versus $5.18 in the prior year. This year, the market expects an improvement in earnings ($7.43 versus $4.70).
  • RDS.A, with its decline in revenue, slightly underperformed the industry average of 38.7%. Since the same quarter one year prior, revenues fell by 40.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income has decreased by 1.8% when compared to the same quarter one year ago, dropping from $4,509.00 million to $4,430.00 million.
  • You can view the full analysis from the report here: RDS.A Ratings Report

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