Story updated at 9:40 a.m. to reflect market activity.
Shares of Sigma-Aldrich gained 0.9% to $95.22 in morning trading.
The firm maintained its "sell" rating for the chemical company. The higher price target is driven by Sigma Aldrich's targeting organic growth with better market penetration and a growing focus on translational work according to UBS analysts.
Separately, TheStreet Ratings team rates SIGMA-ALDRICH CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate SIGMA-ALDRICH CORP (SIAL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SIGMA-ALDRICH CORP has improved earnings per share by 12.5% 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. During the past fiscal year, SIGMA-ALDRICH CORP increased its bottom line by earning $4.05 versus $3.78 in the prior year. This year, the market expects an improvement in earnings ($4.37 versus $4.05).
- Despite its growing revenue, the company underperformed as compared with the industry average of 13.6%. Since the same quarter one year prior, revenues slightly increased by 4.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- SIAL's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.05, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for SIGMA-ALDRICH CORP is rather high; currently it is at 55.12%. Regardless of SIAL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SIAL's net profit margin of 19.15% significantly outperformed against the industry.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: SIAL Ratings Report