NEW YORK (
-- Panasonic Corporation
) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, poor profit margins and weak operating cash flow.
Highlights from the ratings report include:
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Household Durables industry average, but is greater than that of the S&P 500. The net income increased by 46.4% when compared to the same quarter one year prior, rising from -$950.81 million to -$510.09 million.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Household Durables industry and the overall market on the basis of return on equity, PANASONIC CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- Net operating cash flow has significantly decreased to $1,086.37 million or 52.83% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The gross profit margin for PANASONIC CORP is currently lower than what is desirable, coming in at 30.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.20% trails that of the industry average.
- PC has underperformed the S&P 500 Index, declining 15.04% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
Panasonic Corporation, through its subsidiaries, manufactures and sells electronic and electric products, systems, and components for consumer, business, and industrial uses worldwide. The company has a P/E ratio of 14.2, below the average consumer durables industry P/E ratio of 24.2 and below the S&P 500 P/E ratio of 17. Panasonic has a market cap of $24.7 billion and is part of the
industry. Shares are down 12.2% year to date as of the close of trading on Thursday.
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