NEW YORK ( TheStreet Ratings) -- Every trading day TheStreet Ratings' stock model reviews the investment ratings on around 4,700 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 56 U.S. common stocks for week ending April 13, 2012. 25 stocks were upgraded and 31 stocks were downgraded by our stock model.
Rating Change #10
Associated Banc-Corp (ASBC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.Highlights from the ratings report include:
- ASSOCIATED BANC-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, ASSOCIATED BANC-CORP turned its bottom line around by earning $0.67 versus -$0.18 in the prior year. This year, the market expects an improvement in earnings ($0.95 versus $0.67).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 193.6% when compared to the same quarter one year prior, rising from $14.01 million to $41.13 million.
- ASBC, with its decline in revenue, slightly underperformed the industry average of 2.5%. Since the same quarter one year prior, revenues slightly dropped by 6.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Net operating cash flow has significantly decreased to $67.13 million or 56.70% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- ASBC has underperformed the S&P 500 Index, declining 7.65% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.