TSC Ratings' Updates: Kohl's

Farmers Capital Bank(FFKT Quote) has been upgraded from hold to buy. Farmers Capital Bank, a financial holding company, offers banking and bank-related services to individuals, corporations and other customers in central and northern Kentucky. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, expanding profit margins, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

FFKT has improved earnings per share by 8.1% in the most-recent quarter compared with the same quarter a year ago. The company has demonstrated a pattern of positive earnings-per-share growth over the past year. We feel that this trend should continue. During the past fiscal year, FFKT has increased its bottom line by earning $2.01 vs. $1.83 in the prior year. This year, the market expects an improvement in earnings ($2.34 vs. $2.01).

FFKT's revenue growth trails the industry average of 11.9%. Since the same quarter one year prior, revenue has slightly increased by 1.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

The gross profit margin for FFKT is rather high; currently it is at 59.80%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.90% is above that of the industry average.

Compared with where it was trading a year ago, FFKT's share price has not changed very much due to the relatively weak year-over-year performance of the overall market, the company's stagnant earnings and other mixed results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.