Rating Change #1
Loews Corporation (L) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including poor profit margins and disappointing return on equity.
Highlights from the ratings report include:
- The gross profit margin for LOEWS CORP is rather low; currently it is at 24.90%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 10.40% is above that of the industry average.
- 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 to other companies in the Insurance industry and the overall market on the basis of return on equity, LOEWS CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- LOEWS CORP's earnings per share declined by 7.1% in the most recent quarter compared to 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, LOEWS CORP increased its bottom line by earning $3.11 versus $1.31 in the prior year. This year, the market expects an improvement in earnings ($3.28 versus $3.11).
- Compared to its closing price of one year ago, L's share price has jumped by 29.55%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
Loews Corporation, through its subsidiaries, operates primarily as a commercial property and casualty insurance company in the United States. The company has a P/E ratio of 13.6, below the average insurance industry P/E ratio of 13.8 and below the S&P 500 P/E ratio of 17.7. Loews has a market cap of $16.9 billion and is part of the financial sector and insurance industry. Shares are up 5.2% year to date as of the close of trading on Tuesday.You can view the full Loews Ratings Report or get investment ideas from our investment research center. -- Reported by Kevin Baker in Jupiter, Fla.
For additional Investment Research check out our Ratings Research Center. For all other upgrades and downgrades made by TheStreet Ratings Model today check out our upgrades and downgrades list.
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