NEW YORK (TheStreet) -- Shares of First Niagara Financial Group Inc. (FNFG) are lower, down 1.44% to $7.20, on heavy trading volume Monday after the company was downgraded to "sector perform" from "outperform" by analysts at RBC Capital Markets this morning.
Analysts at the firm lowered its price target to $8 from $10.
The Buffalo, NY-based company recently announced a quarterly dividend of 8 cents per share scheduled for Nov. 17, representing a 32 cent annualized dividend and a dividend yield of 4.38%.
About 12.68 million shares of First Niagara Financial Group were traded by 2:34 p.m., compared to its average trading volume of about 4.19 million shares a day.
Separately, TheStreet Ratings team rates FIRST NIAGARA FINANCIAL GRP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate FIRST NIAGARA FINANCIAL GRP (FNFG) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins, growth in earnings per share, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for FIRST NIAGARA FINANCIAL GRP is currently very high, coming in at 86.21%. Regardless of FNFG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FNFG's net profit margin of 19.28% compares favorably to the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.3%. Since the same quarter one year prior, revenues slightly dropped by 2.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- FIRST NIAGARA FINANCIAL GRP has improved earnings per share by 5.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, FIRST NIAGARA FINANCIAL GRP increased its bottom line by earning $0.75 versus $0.40 in the prior year. For the next year, the market is expecting a contraction of 6.7% in earnings ($0.70 versus $0.75).
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Commercial Banks industry average. The net income increased by 3.7% when compared to the same quarter one year prior, going from $71.13 million to $73.79 million.
- You can view the full analysis from the report here: FNFG Ratings Report