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NEW YORK (TheStreet) -- Koppers Holdings (KOP) - Get Report has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
TheStreet Ratings team rates KOPPERS HOLDINGS INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate KOPPERS HOLDINGS INC (KOP) a SELL. This is driven by some concerns, 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 deteriorating net income, generally high debt management risk, disappointing return on equity, poor profit margins and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Chemicals industry. The net income has significantly decreased by 717.1% when compared to the same quarter one year ago, falling from -$4.10 million to -$33.50 million.
- The debt-to-equity ratio is very high at 12.15 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, KOP maintains a poor quick ratio of 0.89, which illustrates the inability to avoid short-term cash problems.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Chemicals industry and the overall market, KOPPERS HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for KOPPERS HOLDINGS INC is currently extremely low, coming in at 14.32%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -7.85% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to $24.70 million or 52.50% 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.
- You can view the full analysis from the report here: KOP Ratings Report