Jarden (JAH) Stock Rallies, RBC Capital Upgrades to 'Top Pick'

Jarden (JAH) shares are jumping after analysts at RBC Capital Markets boosted their ratings on the consumer products company to 'top pick' from 'outperform' with a $60 price target.
By U-Jin Lee ,

NEW YORK (TheStreet) -- Jarden Corp. (JAH)  shares are jumping 1.72% to $47.30 on Tuesday after analysts at RBC Capital Markets this morning boosted their ratings on the consumer products company to "top pick" from "outperform" with a $60 price target.

"Just as Jarden management is opportunistic on making deals, we believe we are being opportunistic with Jarden's recent selloff and under performance," analysts said.

In addition, analyst noted that the stock represents one of the best risk-to-reward profiles across their coverage.

Specifically, the stock has a 29% base case, 10% downside case, and a 51% upside case, according to the firm's note.

Overall, analysts are bullish given the company's strong fundamentals.

Based in Boca Raton, FL, Jarden manufactures, markets, and distributes consumer products worldwide.

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

We rate JARDEN CORP (JAH) 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 net income and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, generally higher debt management risk and weak operating cash flow.

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

  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.2%. Since the same quarter one year prior, revenues slightly increased by 5.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • JARDEN CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, JARDEN CORP increased its bottom line by earning $1.29 versus $1.21 in the prior year. This year, the market expects an improvement in earnings ($2.75 versus $1.29).
  • Currently the debt-to-equity ratio of 1.64 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, JAH's quick ratio is somewhat strong at 1.25, demonstrating the ability to handle short-term liquidity needs.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Household Durables industry and the overall market, JARDEN CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • You can view the full analysis from the report here: JAH
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