Moody's downgraded Precision Drilling's Corporate Family Rating to B2 from Ba2, Probability of Default Rating to B2-PD from Ba2-PD and senior unsecured notes rating to B3 from Ba2.
"The downgrade reflects the lower cash flow and weak leverage resulting from the collapse in drilling activity," Moody's analyst Paresh Chari said in a statement.
Precision Drilling is an oilfield services company based in Calgary.
The stock is gaining by 13.9% to $4.67 on Friday afternoon as energy and related stocks rally along with the price of oil.
Oil prices are jumping following strong U.S. jobs data and technical buying, Reuters reports.
The economy added 242,000 jobs in February and the unemployment rate held at 4.9%. Wages were down by 0.1% from January, but were up 2.2% from last year.
The number of U.S. drilling rigs has declined for the 11th consecutive week, which is also helping give prices a boost. The rig count is down by eight to 392 as of today.
Separately, TheStreet Ratings has set a "sell" rating and a score of D on Precision Drilling stock. This is driven by some concerns, which TheStreet Ratings believes should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks it covers.
The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
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.
You can view the full analysis from the report here: PDSPDS data by YCharts