Rating Change #6
Constellation Energy Group (CEG) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Independent Power Producers & Energy Traders industry average. The net income increased by 29.0% when compared to the same quarter one year prior, rising from $83.80 million to $108.10 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 6.8%. Since the same quarter one year prior, revenues slightly increased by 1.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.55, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.12, which illustrates the ability to avoid short-term cash problems.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- CONSTELLATION ENERGY GRP INC has improved earnings per share by 36.1% 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, CONSTELLATION ENERGY GRP INC swung to a loss, reporting -$4.89 versus $22.07 in the prior year. This year, the market expects an improvement in earnings ($3.18 versus -$4.89).
Constellation Energy Group, Inc. operates as an energy company in the United States and Canada. The company develops, owns, operates, and maintains fossil and renewable generating facilities. Constellation Energy Group has a market cap of $7.8 billion and is part of the utilities sector and utilities industry. Shares are up 23.6% year to date as of the close of trading on Friday.You can view the full Constellation Energy Group Ratings Report or get investment ideas from our investment research center.