NEW YORK (TheStreet) -- Chevron Corp. (CVX - Get Report) stock is decreasing by 3.76% to $86.34 in late morning trading on Monday, after a stronger dollar and OPEC's unchanged policies pressured oil prices.
WTI crude is down by 4.58% to $38.14 per barrel, while Brent crude is declining by 4.05% to $41.26 per barrel this morning, according to the CNBC.com index.
On Friday, OPEC decided to not cut production, despite global oversupply of crude oil that has caused prices to fall more than 60% since June 2014.
OPEC has been pumping more than 30 million barrels per day, which has pressured other producers around the world, including in the U.S.
"It is not unreasonable to assume that downward pressure on prices will remain for the foreseeable future, as it will take time for low prices to materially scale back production," Cenkos Securities analysts told Reuters.
San Ramon, CA-based Chevron engages in the production and transportation oil and natural gas.
Separately, TheStreet Ratings team rates CHEVRON CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate CHEVRON CORP (CVX) 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 largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, disappointing return on equity and weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CVX's debt-to-equity ratio is very low at 0.23 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 0.91 is somewhat weak and could be cause for future problems.
- CVX, with its decline in revenue, slightly underperformed the industry average of 36.8%. Since the same quarter one year prior, revenues fell by 37.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CHEVRON CORP's return on equity is below that of both the industry average and the S&P 500.
- CHEVRON CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, CHEVRON CORP reported lower earnings of $10.14 versus $11.09 in the prior year. For the next year, the market is expecting a contraction of 67.5% in earnings ($3.29 versus $10.14).
- You can view the full analysis from the report here: CVX