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TheStreet Open House

Will This Price Target Increase Help Mobile TeleSystems (MBT) Stock Today?

Story updated at 10 a.m. to reflect market activity.

NEW YORK (TheStreet) -- Barclays raised its price target for Mobile TeleSystems (MBT) to $20.20 Wednesday.

Mobile TeleSystems fell -0.9% to $18.35 in morning trading.

The firm reiterated its "overweight" rating for the telecom. Barclays analysts cited revenue growth driven by overall growth in Russian telecoms as a reason for the increase.

Must read: Warren Buffett's 25 Favorite Stocks

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Separately, TheStreet Ratings team rates MOBILE TELESYSTEMS OJSC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate MOBILE TELESYSTEMS OJSC (MBT) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and a generally disappointing performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 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 Wireless Telecommunication Services industry and the overall market, MOBILE TELESYSTEMS OJSC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $1,113.90 million or 40.92% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 29.11%.
  • The gross profit margin for MOBILE TELESYSTEMS OJSC is currently very high, coming in at 70.42%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MBT's net profit margin of 18.78% significantly trails the industry average.
  • MBT has underperformed the S&P 500 Index, declining 11.94% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The debt-to-equity ratio of 1.44 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, MBT maintains a poor quick ratio of 0.86, which illustrates the inability to avoid short-term cash problems.
  • You can view the full analysis from the report here: MBT Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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