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 impressive record of earnings per share growth, compelling growth in net income, expanding profit margins, solid stock price performance and notable return on equity. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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Highlights from the ratings report include:
- REGIONS FINANCIAL CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, REGIONS FINANCIAL CORP continued to lose money by earning -$0.02 versus -$0.63 in the prior year. This year, the market expects an improvement in earnings ($0.73 versus -$0.02).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 225.7% when compared to the same quarter one year prior, rising from $109.00 million to $355.00 million.
- The gross profit margin for REGIONS FINANCIAL CORP is currently very high, coming in at 87.80%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 23.80% trails the industry average.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- Despite the weak revenue results, RF has outperformed against the industry average of 31.0%. Since the same quarter one year prior, revenues slightly dropped by 7.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
Regions Financial Corporation operates as the holding company for Regions Bank that provides a range of commercial, retail, and mortgage banking services in the United States. The company has a P/E ratio of 55.4, above the S&P 500 P/E ratio of 17.7. Regions Financial has a market cap of $9.39 billion and is part of the
industry. Shares are up 54.7% year to date as of the close of trading on Thursday.
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-- Written by a member of TheStreet Ratings Staff
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.