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Praxair Inc. Stock Buy Recommendation Reiterated (PX)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- Praxair (NYSE: PX) has been reiterated by TheStreet Ratings as a buy with a ratings score of A. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • PX's revenue growth has slightly outpaced the industry average of 1.9%. Since the same quarter one year prior, revenues slightly increased by 1.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $472.00 million or 17.41% when compared to the same quarter last year. In addition, PRAXAIR INC has also vastly surpassed the industry average cash flow growth rate of -164.26%.
  • 43.28% is the gross profit margin for PRAXAIR INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 13.53% trails the industry average.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • PRAXAIR INC's earnings per share declined by 5.8% 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, PRAXAIR INC increased its bottom line by earning $5.61 versus $5.45 in the prior year. This year, the market expects an improvement in earnings ($5.97 versus $5.61).

Praxair, Inc. engages in the production, distribution, and sale atmospheric and process gases, as well as surface coatings in North America, Europe, South America, and Asia. Praxair has a market cap of $34.4 billion and is part of the basic materials sector and chemicals industry. Shares are up 6% year to date as of the close of trading on Tuesday.

You can view the full Praxair Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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