Rating Change #8
NYSE Euronext Inc (NYX) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
Highlights from the ratings report include:
- The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful 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.
- NYX, with its decline in revenue, underperformed when compared the industry average of 6.1%. Since the same quarter one year prior, revenues fell by 17.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- NYSE EURONEXT's earnings per share declined by 42.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NYSE EURONEXT increased its bottom line by earning $2.37 versus $2.20 in the prior year. For the next year, the market is expecting a contraction of 8.4% in earnings ($2.17 versus $2.37).
- The gross profit margin for NYSE EURONEXT is currently lower than what is desirable, coming in at 27.50%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 9.10% trails that of the industry average.
- Net operating cash flow has decreased to $200.00 million or 24.24% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
NYSE Euronext, through its subsidiaries, operates securities exchanges. It operates various stock exchanges, including the New York Stock Exchange (NYSE), NYSE Arca, Inc., and NYSE Amex LLC in the United States; and five European-based exchanges that comprise Euronext N.V. The company has a P/E ratio of 11.6, equal to the average financial services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. NYSE Euronext has a market cap of $6.24 billion and is part of the financial sector and financial services industry. Shares are down 7.9% year to date as of the close of trading on Thursday.You can view the full NYSE Euronext Ratings Report or get investment ideas from our investment research center.