NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- HRS's revenue growth has slightly outpaced the industry average of 0.1%. Since the same quarter one year prior, revenues slightly increased by 3.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- HARRIS CORP's earnings per share declined by 20.5% 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, HARRIS CORP increased its bottom line by earning $4.60 versus $4.28 in the prior year. This year, the market expects an improvement in earnings ($5.15 versus $4.60).
- 36.50% is the gross profit margin for HARRIS CORP which we consider to be strong. Regardless of HRS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.30% trails 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. Compared to other companies in the Communications Equipment industry and the overall market, HARRIS CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
Harris Corporation, together with its subsidiaries, operates as a communications and information technology company that serves government and commercial markets worldwide. It operates in three segments: RF Communications, Integrated Network Solutions, and Government Communications Systems. The company has a P/E ratio of 8.9, equal to the average telecommunications industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Harris has a market cap of $4.46 billion and is part of the
industry. Shares are up 7.8% year to date as of the close of trading on Thursday.
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