NEW YORK (TheStreet) -- Exelon (NYSE:EXC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, poor profit margins and feeble growth in the company's earnings per share. Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 71.02% to $1,936.00 million when compared to the same quarter last year. In addition, EXELON CORP has also vastly surpassed the industry average cash flow growth rate of -5.21%.
- The debt-to-equity ratio is somewhat low, currently at 0.93, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.74 is somewhat weak and could be cause for future problems.
- The gross profit margin for EXELON CORP is currently lower than what is desirable, coming in at 33.20%. Regardless of EXC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, EXC's net profit margin of 14.30% compares favorably to the industry average.
- EXC has underperformed the S&P 500 Index, declining 7.39% from its price level of one year ago. 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.
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