NEW YORK (TheStreet) -- Shares of Ariad Pharmaceuticals Inc. (ARIA - Get Report) were upgraded to "buy" from "hold" at Jefferies Group (JEF) this morning, and the stock is up 4.43% to $7.55 in pre-market trade.
The price target was increased to $8.00 to $14.00
Separately, TheStreet Ratings team rates ARIAD PHARMACEUTICALS INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:"We rate ARIAD PHARMACEUTICALS INC (ARIA) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has decreased by 22.7% when compared to the same quarter one year ago, dropping from -$60.45 million to -$74.16 million.
- Looking at the price performance of ARIA's shares over the past 12 months, there is not much good news to report: the stock is down 56.32%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- Net operating cash flow has decreased to -$51.57 million or 25.49% when compared to the same quarter last year. Despite a decrease in cash flow ARIAD PHARMACEUTICALS INC is still fairing well by exceeding its industry average cash flow growth rate of -66.38%.
- ARIAD PHARMACEUTICALS INC's earnings per share declined by 11.1% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ARIAD PHARMACEUTICALS INC reported poor results of -$1.49 versus -$1.34 in the prior year. This year, the market expects an improvement in earnings (-$1.12 versus -$1.49).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, ARIAD PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: ARIA Ratings Report