NEW YORK (TheStreet) -- Fossil (FOSL - Get Report) stock has been upgraded to "hold" from "sell," Brean Murray said Monday. The firm said it was a valuation call as the stock is down 15% year to date.
TheStreet Ratings team rates FOSSIL GROUP INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate FOSSIL GROUP INC (FOSL) a BUY. This is driven by a number of 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 notable return on equity, reasonable valuation levels, revenue growth, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 17.2%. Since the same quarter one year prior, revenues rose by 14.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, FOSSIL GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- FOSSIL GROUP INC reported flat earnings per share in the most recent quarter. 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, FOSSIL GROUP INC increased its bottom line by earning $6.62 versus $5.62 in the prior year. This year, the market expects an improvement in earnings ($7.15 versus $6.62).
- The gross profit margin for FOSSIL GROUP INC is rather high; currently it is at 60.09%. 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 8.54% trails the industry average.
- You can view the full analysis from the report here: FOSL Ratings Report