The firm said it raised its rating on the transportation fuels and convenience good retailer based on its belief CST will deliver solid growth.
Credit Suisse upped its price target on the stock to $35 from $29.
Separately, TheStreet Ratings team rates CST BRANDS INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
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"We rate CST BRANDS INC (CST) 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, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, unimpressive growth in net income and generally higher debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to other companies in the Specialty Retail industry and the overall market on the basis of return on equity, CST BRANDS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- CST, with its decline in revenue, slightly underperformed the industry average of 0.5%. Since the same quarter one year prior, revenues slightly dropped by 5.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- CST BRANDS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. For the next year, the market is expecting a contraction of 8.0% in earnings ($1.72 versus $1.87).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Specialty Retail industry. The net income has significantly decreased by 52.2% when compared to the same quarter one year ago, falling from $23.00 million to $11.00 million.
- You can view the full analysis from the report here: CST Ratings Report