Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model
NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
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Highlights from the ratings report include:
- ELP's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ELP has a quick ratio of 1.54, which demonstrates the ability of the company to cover short-term liquidity needs.
- ELP, with its decline in revenue, underperformed when compared the industry average of 1.8%. Since the same quarter one year prior, revenues fell by 26.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for COPEL-CIA PARANAENSE ENERGIA is rather low; currently it is at 17.50%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 8.00% trails that of the industry average.
- 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. When compared to other companies in the Electric Utilities industry and the overall market, COPEL-CIA PARANAENSE ENERGIA's return on equity is below that of both the industry average and the S&P 500.
Companhia Paranaense de Energia Copel engages in the generation, transmission, distribution, and sale of electricity primarily to industrial, residential, commercial, and rural customers primarily in the state of Parana, Brazil. The company has a P/E ratio of 19.8, above the average utilities industry P/E ratio of 7.5 and above the S&P 500 P/E ratio of 17.7. Energy Company of Parana has a market cap of $4.43 billion and is part of the
industry. Shares are down 21.3% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet Ratings Staff
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