TSC Ratings' Updates: Tyson

The following ratings changes were generated on Friday, Nov. 7.

We've downgraded AstraZeneca(AZN Quote), which discovers, develops, manufactures and markets prescription pharmaceuticals, biologics and vaccines from buy to hold. Strengths include its increase in net income, revenue growth and good cash flow from operations. However, as a counter to these strengths, we find that the stock has had a decline in price during the past year.

The net income growth of 28.8% from the same quarter one year ago has significantly exceeded that of the S&P 500 and the pharmaceuticals industry. However, despite its revenue growth of 7.6%, the company underperformed the industry average of 9.9%. AstraZeneca has improved earnings per share by 32.2% in the most recent quarter compared with the same quarter a year ago.

This company has reported somewhat volatile earnings recently, but we feel it is poised for EPS growth in the coming year. During the past fiscal year, it reported lower earnings of $3.73 vs. $3.85 in the prior year. This year, the market expects an improvement in earnings to $5.

The company's current return on equity has slightly decreased from the same quarter one year prior, implying a minor weakness in the organization. Shares are down 14.63% on the year, reflecting, in part, the market's overall decline. 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.