NEW YORK (
-- Sears Holdings Corporation
) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 25.82%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1228.57% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- The gross profit margin for SEARS HOLDINGS CORP is currently lower than what is desirable, coming in at 26.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.80% trails that of the industry average.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Multiline Retail industry and the overall market, SEARS HOLDINGS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- 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 Multiline Retail industry. The net income has significantly decreased by 1162.5% when compared to the same quarter one year ago, falling from $16.00 million to -$170.00 million.
- SEARS HOLDINGS CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, SEARS HOLDINGS CORP reported lower earnings of $1.24 versus $2.07 in the prior year. For the next year, the market is expecting a contraction of 154.8% in earnings (-$0.68 versus $1.24).
Sears Holdings Corporation operates as a broadline retailer in the United States and Canada. Its Kmart segment operates stores that sell general merchandise under Jaclyn Smith and Joe Boxer labels, as well as Sears brand products, such as Kenmore, Craftsman, and DieHard. The company has a P/E ratio of 63.7, equal to the average retail industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Sears has a market cap of $8.2 billion and is part of the
industry. Shares are up 0.1% year to date as of the close of trading on Friday.
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