TSC Ratings' Updates: Avon

The following ratings changes were generated on Wednesday, Nov. 5.

We've downgraded beauty-product maker Avon Products(AVP Quote) from buy to hold. Strengths include its impressive record of earnings per share growth, compelling growth in net income and revenue growth. Weaknesses include a generally disappointing performance in the stock itself and generally poor debt management.

Avon reported significant earnings per share improvement in the most recent quarter compared with the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year, and we feel that this trend should continue, suggesting improving business performance. During the past fiscal year, Avon increased its bottom line by earning $1.22 vs. $1.05 in the prior year. This year, the market expects an improvement in earnings to $2.16. Net income increased by 60% over the same quarter last year, to $222.6 million, exceeding the average net income growth of the S&P 500 and but less than that of the personal products industry. ...