Rating Change #6
Safeway Inc (SWY) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally poor debt management, poor profit margins and weak operating cash flow.
Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food & Staples Retailing industry. The net income increased by 190.4% when compared to the same quarter one year prior, rising from $25.10 million to $72.90 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 6.6%. Since the same quarter one year prior, revenues slightly increased by 2.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- SAFEWAY INC reported significant earnings per share improvement 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, SAFEWAY INC reported lower earnings of $1.53 versus $1.57 in the prior year. This year, the market expects an improvement in earnings ($1.97 versus $1.53).
- The gross profit margin for SAFEWAY INC is currently lower than what is desirable, coming in at 29.50%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.70% trails that of the industry average.
- Net operating cash flow has significantly decreased to -$541.80 million or 803.00% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
Safeway Inc., together with its subsidiaries, operates as a food and drug retailer in North America. The company has a P/E ratio of 14.5, equal to the average retail industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Safeway has a market cap of $5.56 billion and is part of the services sector and retail industry. Shares are down 0.5% year to date as of the close of trading on Friday.You can view the full Safeway Ratings Report or get investment ideas from our investment research center.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV