UPS, U.S. Steel, Cummins: Ratings Upgrades

UPS, U.S. Steel and Cummins were upgraded by TheStreet.
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BOSTON (TheStreet) -- Here are three upgrades from TheStreet's stock-rating model.

3. The model upgraded

U.S. Steel

(X) - Get Report

to "hold."

Quarter

: U.S. Steel swung to a fourth-quarter loss of $267 million, or $1.86, from a profit of $290 million, or $2.50, a year earlier. Revenue dropped 26%. The operating margin fell into negative territory. U.S. Steel has $1.3 billion of cash and $3.4 billion of debt.

Stock

: U.S. Steel has surged 147% during the past year, more than U.S. indices. The stock trades at a price-to-projected-earnings ratio of 14 and a price-to-book ratio of 2, 29% and 53% discounts to industry averages. It's also cheap based on sales.

Consensus

: Of analysts covering U.S. Steel, eight, or 53%, advise purchasing its shares, four recommend holding and three suggest selling them.

KeyCorp

(KEY) - Get Report

expects the stock to advance 32% to $85.

Bank of America

(BAC) - Get Report

predicts it will hit $78.

>> Who Owns U.S. Steel?: Bruce Kovner

2. The model upgraded

Cummins

(CMI) - Get Report

to "buy."

Quarter

: Fourth-quarter profit rose fivefold to $270 million, or $1.36, as revenue grew 3.4% to $3.4 billion. The operating margin expanded from 2.8% to 9.3%. Cummins has $1.1 billion of cash and $704 million of debt, equal to a debt-to-equity ratio of 0.2.

Stock

: Cummins has doubled during the past year, beating major benchmarks. It sells for a price-to-projected-earnings ratio of 17 and a price-to-sales ratio of 1.2, 31% and 15% discounts to industry averages. It's expensive based on book value.

Consensus

: Of researchers following Cummins, 11, or 58%, rate its stock "buy", seven rate it "hold" and one rates it "sell."

UBS

(UBS) - Get Report

says the stock could increase 22% to $80.

Goldman Sachs

(GS) - Get Report

expects the shares to gain 15% to $75.

1. The model upgraded

UPS

(UPS) - Get Report

to "buy."

Quarter

: Fourth-quarter profit tripled to $757 million, or 75 cents, as revenue declined 2.5% to $12 billion. The operating margin tightened from 11% to 10%. UPS has $2.1 billion of cash and $9.5 billion of debt, amounting to a debt-to-equity ratio of 1.2.

Stock

: UPS has risen 21% during the past year, lagging behind U.S. indices. The stock trades at a price-to-projected-earnings ratio of 18 and a price-to-cash-flow ratio of 12, 23% and 16% discounts to peer-group averages. It's expensive based on book value.

Consensus

: Of firms rating UPS, 13, or 54%, advocate purchasing its shares, 10 advise holding and one recommends selling them.

RBC

(RY) - Get Report

predicts the stock will climb 17% to $76.

JPMorgan

(JPM) - Get Report

believes the shares will rise to $74.

Visit Stockpickr's

Ratings Upgrades Portfolio

and

Ratings Downgrades Portfolio

>> Who Owns UPS?: Wallace Weitz

-- Reported by Jake Lynch in Boston.