TSC Ratings' Updates: Herman Miller

NRGY had been rated a buy since May 14, 2007.

Textron(TXT Quote) has been downgraded from buy to hold. Textron operates in the aircraft, industrial and finance industries worldwide. It operates through four segments: Bell, Cessna, Industrial and Finance. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including poor profit margins, a generally disappointing performance in the stock itself and generally poor debt management.

TXT's revenue growth has slightly outpaced the industry average of 19.7%. Since the same quarter one year prior, revenue rose by 21.1%. Growth in the company's revenue appears to have helped boost the earnings per share.

TXT has improved earnings per share by 21.9% 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, TXT has increased its bottom line by earning $3.59 vs. $2.72 in the prior year. This year, the market expects an improvement in earnings ($3.92 vs. $3.59).

The debt-to-equity ratio is very high at 2.57 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Even though the debt-to-equity ratio is weak, TXT's quick ratio is somewhat strong at 1.34, demonstrating the ability to handle short-term liquidity needs.