NEW YORK (TheStreet) -- Spectra Energy Corp. (SE - Get Report) shares closed Monday's trading session up 3.34% to $24.74 after analysts at Raymond James upgraded the company to "strong buy" from "outperform."
The firm has a price target of $31 on the stock.
Separately, the company's Platte pipeline, which transports crude oil from Wyoming to Illinois, resumed normal operations on Sunday after shutting down last week due to flooding from the Mississippi River, Reuters reports.
Overall, the Dow Jones industrial average closed about 275 points lower today after falling more than 450 points this morning, down over 2.5%, briefly on track for its largest percent decline on the first trading day of the year since 1932, CNBC.com reports.
U.S. stocks were pressured by the concerns of global economic slowdown and increased tensions in the Middle East. Additionally, an overnight drop in Chinese stocks, which triggered a "circuit-breaker," suspended equities trade nationwide,Reuters said.
Headquartered in Houston, Spectra Energy operates in three key areas of the natural gas industry: transmission and storage, distribution, and gathering and processing.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate SPECTRA ENERGY CORP as a Hold with a ratings score of C. 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 expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and a generally disappointing performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for SPECTRA ENERGY CORP is rather high; currently it is at 52.31%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.77% significantly outperformed against the industry average.
- Net operating cash flow has slightly increased to $367.00 million or 8.90% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -26.80%.
- Despite the weak revenue results, SE has outperformed against the industry average of 36.9%. Since the same quarter one year prior, revenues slightly dropped by 8.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, SPECTRA ENERGY CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Currently the debt-to-equity ratio of 1.91 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.35, which clearly demonstrates the inability to cover short-term cash needs.
- You can view the full analysis from the report here: SE