NEW YORK (
-- First Bancorp
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, expanding profit margins and increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow.
Highlights from the ratings report include:
- FBNC has underperformed the S&P 500 Index, declining 23.83% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- Net operating cash flow has significantly decreased to $5.50 million or 73.66% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The gross profit margin for FIRST BANCORP/NC is rather high; currently it is at 58.30%. Regardless of FBNC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FBNC's net profit margin of 14.90% is significantly lower than the same period one year prior.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 11.9%. Since the same quarter one year prior, revenues slightly dropped by 6.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- FIRST BANCORP/NC reported significant earnings per share improvement in the most recent quarter compared to 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, FIRST BANCORP/NC reported lower earnings of $0.35 versus $3.37 in the prior year. This year, the market expects an improvement in earnings ($0.74 versus $0.35).
First Bancorp operates as the holding company for First Bank that provides a range of banking services to individuals and small to medium-sized businesses. The company has a P/E ratio of 24.8, equal to the average banking industry P/E ratio and above the S&P 500 P/E ratio of 17.7. First has a market cap of $196 million and is part of the
industry. Shares are down 23.6% year to date as of the close of trading on Friday.
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