Rating Change #1
Valley National Bancorp
(VLY - Get Report)
has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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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 Commercial Banks industry. The net income increased by 48.4% when compared to the same quarter one year prior, rising from $24.82 million to $36.83 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.0%. Since the same quarter one year prior, revenues slightly increased by 9.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The gross profit margin for VALLEY NATIONAL BANCORP is currently very high, coming in at 74.80%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 18.71% trails the industry average.
- VALLEY NATIONAL BANCORP has improved earnings per share by 33.0% 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, VALLEY NATIONAL BANCORP reported lower earnings of $0.74 versus $0.76 in the prior year. For the next year, the market is expecting a contraction of 6.2% in earnings ($0.70 versus $0.74).
- VLY has underperformed the S&P 500 Index, declining 13.77% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.
Valley National Bancorp operates as the bank holding company for the Valley National Bank that provides various commercial, retail, trust, and investment services. Its deposit products include savings accounts, NOW accounts, money market accounts, time deposits, and certificates of deposit. The company has a P/E ratio of 37.6, above the S&P 500 P/E ratio of 17.7. Valley has a market cap of $1.93 billion and is part of the financial sector and banking industry. Shares are up 5.2% year to date as of the close of trading on Friday.
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-- Reported by Kevin Baker in Palm Beach Gardens, Fla.
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Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.