NEW YORK (TheStreet) -- Canaccord upgraded Esterline Technologies (ESL - Get Report) to "buy" and set a $138 price target. The firm said the company is in early stages of significant margin improvement.
The stock closed at $117.22 on Thursday.
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- ESL's revenue growth has slightly outpaced the industry average of 3.2%. Since the same quarter one year prior, revenues slightly increased by 6.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.47, which illustrates the ability to avoid short-term cash problems.
- ESTERLINE TECHNOLOGIES CORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, ESTERLINE TECHNOLOGIES CORP increased its bottom line by earning $5.22 versus $3.59 in the prior year. This year, the market expects an improvement in earnings ($5.60 versus $5.22).
- The net income growth from the same quarter one year ago has exceeded that of the Aerospace & Defense industry average, but is less than that of the S&P 500. The net income increased by 3.9% when compared to the same quarter one year prior, going from $35.52 million to $36.90 million.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 58.41% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- You can view the full analysis from the report here: ESL Ratings Report