NEW YORK (TheStreet) -- Shares of Harsco(HSC) - Get Report are rising by 5.93% to $12.51 in early afternoon trading, after a rating upgrade to "overweight" from "sector weight" at KeyBanc on Monday morning.
Although Harsco faces the broader challenges affecting the oil and gas industry, the company should be able to refinance its debt by early October, KeyBanc said in an analyst note.
Harsco had net debt of about $876 million at the end of its 2015 second quarter, according to MarketWatch.
The firm also mentioned that the company's rail and industrial segment has "strong" long-term asset characteristics, and its metals and minerals segment has "hidden early momentum."
Harsco is a provider of industrial services and engineered products based in Camp Hill, Penn.
Separately, TheStreet Ratings team rates HARSCO CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate HARSCO CORP (HSC) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, generally high debt management risk, poor profit margins and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- HSC's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 51.70%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- The debt-to-equity ratio is very high at 3.55 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, HSC maintains a poor quick ratio of 0.76, which illustrates the inability to avoid short-term cash problems.
- The gross profit margin for HARSCO CORP is rather low; currently it is at 20.92%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.44% trails that of the industry average.
- Net operating cash flow has decreased to $34.75 million or 25.95% 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 company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Machinery industry and the overall market, HARSCO CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: HSC Ratings Report