Story updated at 9:55 a.m. to reflect market activity.
USG fell -0.2% to $27.77 in morning trading.
The firm also lowered its EPS estimates for the company. The lower price target and estimates are due to softer demand in R&R and new construction according to Jefferies analysts.
Separately, TheStreet Ratings team rates USG CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate USG CORP (USG) 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 revenue growth, increase in stock price during the past year and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- USG's revenue growth has slightly outpaced the industry average of 5.2%. Since the same quarter one year prior, revenues slightly increased by 4.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The gross profit margin for USG CORP is rather low; currently it is at 21.29%. Regardless of USG's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, USG's net profit margin of 5.29% compares favorably to the industry average.
- The debt-to-equity ratio is very high at 3.46 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, USG's quick ratio is somewhat strong at 1.33, demonstrating the ability to handle short-term liquidity needs.
- You can view the full analysis from the report here: USG Ratings Report