Whiting Petroleum Corp (WLL) Stock Trades Lower After Goldman Downgrade

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Analysts at Goldman Sachs slashed their rating on Whiting Petroleum from a Buy to a Neutral, citing further downward pressure on the company’s stock

Whiting Petroleum Corp (NYSE:WLL) stock slipped nearly 2% in today’s pre-market trading session, after analysts at Goldman Sachs slashed its rating on the company from a Buy to a Neutral. The oil and gas company have previously failed to produce any positive update and news to its shareholders as its stock took a turn for the worst, falling a little over 73% in the last twelve months.

Analysts at Goldman Sachs downgraded their rating on Whiting Petroleum stock as the research firm expects the company’s stock price can face further pressure in the near-term. The potential downward tick in the stock price is based on Whiting Petroleum’s decision to reduce debt, which can in turn cause dilution in the coming quarters. The research firm has also made a downward revision in its twelve-month price target to $12.75, down from its previous rating of $13.75.

The oil and gas company has previously posted disappointing top and bottom line results for its first quarter of 2016, after which Whiting’s share price declined nearly 2% in the extended trading session. Whiting Petroleum managed to generate $292 million in total revenues which failed to beat the Street’s estimates of $344.86 million. Additionally, the company posted adjusted loss per share (LPS) of 84 cents, trailing behind its consensus estimate by 12 cents.

Whiting Petroleum has underperformed its peers and oil prices, especially after the company announced its debt exchange deal. However, several investment banks on Wall Street including the likes of Morgan Stanley and Canaccord launched bullish comments after the company revealed its debt exchange deal.

Morgan Stanley upgraded Whiting Petroleum stock from an Underweight to an Equal Weight, citing favorable risk/reward profile. The research firm believes that the aforementioned debt deal will remove the leverage overhang in the near-term. Whiting Petroleum stock has now surged more than 9% in the last three months, compared to Dow Jones Index which rose nearly 1.5%.

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