JPMorgan Chase (JPM - Get Report), a financial services company, has been downgraded to hold. Strengths including revenue growth, attractive valuation and expanding profit margins are balanced by poor debt management, weak operating cash flow and a disappointing stock-price performance. For the fourth quarter, revenue grew 8.2% year over year to $28.78 billion, but EPS decreased to 86 cents from $1.09. Return on equity has improved marginally over the same period.
JPMorgan's debt-to-equity ratio, at 3.50, exceeds industry average, implying very poor management of debt levels. Net operating cash flow has decreased to -$29.25 billion from the year-ago quarter. In addition, the firm's growth rate is much lower than the industry average. JPMorgan Chase had been rated buy since March 3, 2006.
Nobel Learning Communities (NLCI), which operates a network of nonsectarian private schools, has been upgraded to buy. For the second quarter of its fiscal 2008, revenue increased 12% to $51.2 million, but earnings per share decreased to 21 cents from 34 cents. For 2008, the market expects full-year EPS to improve to 74 cents from 71 cents for 2007. Net operating cash flow increased 274% to $4.96 million over the same period. However, the company's growth still lags the industry average. With a debt-to-equity ratio of 0.07, Nobel Learning Communities displays successful management of debt levels. However, its quick ratio of 0.07 shows an inability to pay short-term obligations. Nobel Learning Communities had been rated hold since Feb. 6.
Additional ratings changes are listed below.
|Ticker||Company Name||Change||New Rating||Former Rating|
|BELM||BELL MICROPRODUCTS INC||Downgrade||Sell||Hold|
|CT||CAPITAL TRUST INC/MD||Downgrade||Hold||Buy|
|HCN||HEALTH CARE REIT INC||Upgrade||Buy||Hold|
|JPM||JPMORGAN CHASE & CO||Downgrade||Hold||Buy|
|NLCI||NOBEL LEARNING CMNTYS INC||Upgrade||Buy||Hold|
|Source: INSERT SOURCE|