Update (9:43 a.m.): Updated with Thursday market open information.
NEW YORK (TheStreet) -- Bank of America/Merrill Lynch downgraded Huntington Ingalls (HII) to "neutral" from "buy" and set a $106 price target. The firm cited valuation, as the stock is up 11% year-to-date.
The stock was down 1.46% to $98.24 at 9:41 a.m. on Thursday.
Must Read: Warren Buffett's 10 Favorite Growth StocksSTOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. ---------- Separately, TheStreet Ratings team rates HUNTINGTON INGALLS IND INC as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation: "We rate HUNTINGTON INGALLS IND INC (HII) 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 revenue growth, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. 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:
- HII's revenue growth has slightly outpaced the industry average of 3.2%. Since the same quarter one year prior, revenues slightly increased by 6.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 85.71% and other important driving factors, this stock has surged by 88.26% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HII should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- HUNTINGTON INGALLS IND INC reported significant earnings per share improvement 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, HUNTINGTON INGALLS IND INC increased its bottom line by earning $5.17 versus $2.91 in the prior year. This year, the market expects an improvement in earnings ($7.23 versus $5.17).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Aerospace & Defense industry. The net income increased by 82.0% when compared to the same quarter one year prior, rising from $50.00 million to $91.00 million.
- The gross profit margin for HUNTINGTON INGALLS IND INC is rather low; currently it is at 22.03%. Regardless of HII's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.69% trails the industry average.
- You can view the full analysis from the report here: HII Ratings Report
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