Rating Change #6
Brunswick Corporation (BC) has been upgraded by TheStreet Ratings from sell to hold. 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 weak operating cash flow, generally poor debt management and poor profit margins.
Highlights from the ratings report include:
- Net operating cash flow has significantly decreased to -$83.10 million or 395.72% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The debt-to-equity ratio is very high at 6.58 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, BC's quick ratio is somewhat strong at 1.01, demonstrating the ability to handle short-term liquidity needs.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- BRUNSWICK CORP reported significant earnings per share improvement in the most recent quarter compared to 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, BRUNSWICK CORP continued to lose money by earning -$1.25 versus -$6.62 in the prior year. This year, the market expects an improvement in earnings ($0.45 versus -$1.25).
- The revenue growth came in higher than the industry average of 6.6%. Since the same quarter one year prior, revenues rose by 16.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
Brunswick Corporation provides recreation products worldwide. Brunswick has a market cap of $1.5 billion and is part of the consumer goods sector and consumer durables industry. Shares are down 8.5% year to date as of the close of trading on Tuesday.You can view the full Brunswick Ratings Report or get investment ideas from our investment research center.