NEW YORK (TheStreet) -- Shares of Ruth's Hospitality Group Inc. (RUTH - Get Report) are up 2.12% to $12.51 as Raymond James (RJF - Get Report) upgraded the restaurant company to "outperform" from "market perform" with a $13.50 price target, and citing the recent pullback in shares.
TheStreet Ratings team rates RUTHS HOSPITALITY GROUP INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate RUTHS HOSPITALITY GROUP INC (RUTH) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, increase in net income, notable return on equity and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- RUTHS HOSPITALITY GROUP INC has improved earnings per share by 20.0% 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, RUTHS HOSPITALITY GROUP INC turned its bottom line around by earning $0.67 versus -$0.60 in the prior year. This year, the market expects an improvement in earnings ($0.74 versus $0.67).
- The net income growth from the same quarter one year ago has significantly exceeded that of the Hotels, Restaurants & Leisure industry average, but is less than that of the S&P 500. The net income increased by 14.4% when compared to the same quarter one year prior, going from $3.65 million to $4.18 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, RUTHS HOSPITALITY GROUP INC's return on equity exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: RUTH Ratings Report