"We are raising our price target and reiterating our 'buy' rating after incorporating lower well costs in the Eagle Ford and the additional Delaware Basin acreage acquired during the quarter," Cantor Fitzgerald analysts said.
However, the firm noted that primary risks include commodity price volatility and operational risks associated with the company's development and exploration programs.
Carrizo Oil & Gas is a Houston-based energy company that is engaged in the exploration, development and production of oil and gas from resource plays.
Shares of Carrizo Oil & Gas are dropping, down 4.10% to $35.29 in afternoon trading on Thursday. U.S. crude oil prices fell under $43 a barrel on a stronger dollar and fears of increasing stockpiles today.
Separately, TheStreet Ratings team rates CARRIZO OIL & GAS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CARRIZO OIL & GAS INC (CRZO) 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 good cash flow from operations, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has remained constant at $92.39 million with no significant change when compared to the same quarter last year. Along with maintaining stable cash flow from operations, the firm exceeded the industry average cash flow growth rate of -21.91%.
- The gross profit margin for CARRIZO OIL & GAS INC is currently very high, coming in at 75.60%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, CRZO's net profit margin of -37.35% significantly underperformed when compared to the industry average.
- 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 2089.3% when compared to the same quarter one year ago, falling from $2.32 million to -$46.13 million.
- The debt-to-equity ratio of 1.07 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.24, which clearly demonstrates the inability to cover short-term cash needs.
- You can view the full analysis from the report here: CRZO Ratings Report