NEW YORK (TheStreet) -- JMP Securities lowered its price target on Knowles Corp. (KN) - Get Knowles Corp. Report to $24 from $27 and maintained its "market outperform" rating on the stock on Wednesday morning.
The price target decrease follows a range of negative developments with smartphone component vendors and ODMs, the firm said.
JMP Securities also reduced its revenue estimates for the 2015 fourth quarter to $295 million from $305 million.
"Our new estimates reflect lower smartphone industry growth assumptions and slightly higher-than-originally-anticipated audience declines, offset in part by certain favorable tailwinds for Knowles that include the MEMs Mic count increase in the iPhone 6s (AAPL, MO, $165 PT), better ASPs in newer platforms, Op Ex discipline, and improving sales trends in China," the firm said in an analyst note.
The Itasca, IL-based company is a supplier of micro-acoustic solutions and specialty components for mobile communications, consumer electronics, medical technology, military, aerospace and industrial markets.
Shares of Knowles are declining by 1.47% to $14.07 during mid-afternoon trading on Wednesday.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate KNOWLES CORP as a Sell with a ratings score of D+. This is driven by a number of negative factors, 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 weak operating cash flow, generally disappointing historical performance in the stock itself and unimpressive growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly decreased to -$11.90 million or 148.81% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- KN has underperformed the S&P 500 Index, declining 22.45% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Electronic Equipment, Instruments & Components industry average. The net income has decreased by 2.0% when compared to the same quarter one year ago, dropping from -$14.61 million to -$14.90 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, KNOWLES CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- KN, with its decline in revenue, slightly underperformed the industry average of 1.7%. Since the same quarter one year prior, revenues slightly dropped by 2.1%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- You can view the full analysis from the report here: KN