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Why Newfield Exploration Is Underperforming in 2018

Nicholas Chapman - Author

Aug. 18 2020, Updated 4:40 a.m. ET

Newfield Exploration: The third-worst-performing upstream stock in 2018

In 2018 so far, Newfield Exploration (NFX) is the third-worst-performing US upstream stock. Newfield Exploration primarily operates in the Anadarko and Arkoma basins of Oklahoma, the Williston Basin of North Dakota, and the Uinta Basin of Utah.

Year-to-date in 2018, NFX fell ~26% from its 2017 close of $31.53 to $23.30. Newfield Exploration badly underperformed the SPDR S&P Oil and Gas Exploration & Production ETF (XOP). XOP is down ~6% in 2018. NFX has also underperformed crude oil (USO) and natural gas (UNG). In 2018 so far, crude oil is up ~2%, whereas natural gas is down ~6%.

In comparison, the Energy Select Sector SPDR Fund (XLE) is down ~5% in 2018.

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Newfield Exploration’s revenues and earnings

In 2017, Newfield Exploration reported revenues of ~$1.77 billion, which is ~20% higher than its past revenues of ~$1.47 billion. In 2017, NFX reported an adjusted profit of ~$432 million, which is ~84% higher than its profit of ~$235 million in 2016.

NFX has a high total debt-to-equity ratio, or leverage, of ~173%

Next in this series, we’ll analyze the year-to-date performance of California Resources (CRC) and analyze its fundamental metrics.


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