Getting downgraded to hold from buy was AGL Resources (ATG). The Atlanta-based firm specializes in the distribution of natural gas, primarily in Florida, Georgia, Maryland, New Jersey, Tennessee and Virginia. 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.
ATG has experienced a steep decline in earnings per share in the most-recent quarter in comparison with its performance from the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, AGL Resources increased its bottom line by earning $2.73 vs. $2.72 in the prior year. This year, the market expects an improvement in earnings ($2.79 vs. $2.73).
ATG, with its decline in revenue, underperformed when compared with the industry average of 15.6%. Since the same quarter one year prior, revenue has slightly dropped by 4.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
The share price of ATG is down 8.33% when compared with where it was trading one year earlier. This reflects both the trend in the overall market as well as the sharp decline in the company's earnings per share. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.