NEW YORK (
-- ACCO Brands
) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and poor profit margins.
Highlights from the ratings report include:
- 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 Commercial Services & Supplies industry. The net income has significantly decreased by 114.8% when compared to the same quarter one year ago, falling from -$8.10 million to -$17.40 million.
- The gross profit margin for ACCO BRANDS CORP is currently lower than what is desirable, coming in at 31.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -6.00% is significantly below that of the industry average.
- Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- ACCO, with its decline in revenue, slightly underperformed the industry average of 2.3%. Since the same quarter one year prior, revenues slightly dropped by 3.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- ACCO BRANDS CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. 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, ACCO BRANDS CORP increased its bottom line by earning $0.32 versus $0.13 in the prior year. This year, the market expects an improvement in earnings ($0.82 versus $0.32).
ACCO Brands Corporation engages in the design, manufacture, marketing, and distribution of office products primarily in the United States, Australia, the United Kingdom, and Canada. The company has a P/E ratio of 31.6, above the average consumer non-durables industry P/E ratio of 10.3 and above the S&P 500 P/E ratio of 17.7. ACCO has a market cap of $560.9 million and is part of the
industry. Shares are up 7.6% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff