Editor's Note: 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.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its solid stock price performance, attractive valuation levels, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- Compared to its closing price of one year ago, SNY's share price has jumped by 30.81%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SNY should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The gross profit margin for SANOFI is rather high; currently it is at 60.80%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 12.40% trails the industry average.
- SANOFI's earnings per share declined by 7.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SANOFI increased its bottom line by earning $2.81 versus $2.79 in the prior year. This year, the market expects an improvement in earnings ($4.48 versus $2.81).
- SNY's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.78 is somewhat weak and could be cause for future problems.
Sanofi, together with its subsidiaries, researches, develops, manufactures, and markets healthcare products worldwide. Sanofi has a market cap of $120.53 billion and is part of the health care sector and drugs industry. The company has a P/E ratio of 24.5, above the S&P 500 P/E ratio of 17.7. Shares are up 21.9% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.
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