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TheStreet Open House

TheStreet Ratings Top 10 Rating Changes

NEW YORK ( TheStreet Ratings) -- Every trading day TheStreet Ratings' stock model reviews the investment ratings on around 4,800 U.S. traded stocks for potential upgrades or downgrades based on the latest available financial results and trading activity.

TheStreet Ratings released rating changes on 122 U.S. common stocks for week ending August 26, 2011. 19 stocks were upgraded and 103 stocks were downgraded by our stock model.

Rating Change #10

Total (TOT) has been downgraded by TheStreet Ratings from buy 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 attractive valuation levels. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:

  • TOT's revenue growth has slightly outpaced the industry average of 39.6%. Since the same quarter one year prior, revenues rose by 48.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TOTAL SA has improved earnings per share by 16.7% 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, TOTAL SA increased its bottom line by earning $6.27 versus $5.42 in the prior year. This year, the market expects an improvement in earnings ($7.45 versus $6.27).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, TOTAL SA has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • In its most recent trading session, TOT has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
  • The gross profit margin for TOTAL SA is rather low; currently it is at 17.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.80% trails that of the industry average.

TOTAL S.A., together with its subsidiaries, operates as an integrated oil and gas company worldwide. The company operates through three segments: Upstream, Downstream, and Chemicals. The Upstream segment engages in the exploration, development, and production of oil and natural gas. The company has a P/E ratio of 6.3, below the average energy industry P/E ratio of 6.9 and below the S&P 500 P/E ratio of 17.7. Total has a market cap of $109.1 billion and is part of the basic materials sector and energy industry. Shares are down 9.9% year to date as of the close of trading on Thursday.

You can view the full Total Ratings Report or get investment ideas from our investment research center.

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