TSC Ratings' Updates: City National
The following ratings' changes were generated on Monday, Oct. 6.
City National (CNY) has been upgraded from hold to buy. City National Corporation operates as the bank holding company for City National Bank, which provides banking, investment and trust services. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Net operating cash flow has significantly increased by 107.45% to $3.17 million when compared with the same quarter last year. Despite an increase in cash flow of 107.45%, CNY is still growing at a significantly lower rate than the industry average of 336.61%.
The gross profit margin for CNY is currently very high, coming in at 71.50%. Regardless of CYN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CYN's net profit margin of 12.90% compares favorably with the industry average.CYN, with its decline in revenue, underperformed when compared with the industry average of 10.8%. Since the same quarter one year prior, revenue has slightly dropped by 8.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share. The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared with other companies in the commercial banking industry and the overall market on the basis of return on equity, CNY has outperformed in comparison with the industry average, but it has underperformed when compared with the S&P 500.
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