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 (
-- State Street
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins, good cash flow from operations, solid stock price performance and notable return on equity. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
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Highlights from the ratings report include:
- The gross profit margin for STATE STREET CORP is currently very high, coming in at 95.60%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.30% is above that of the industry average.
- STATE STREET CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, STATE STREET CORP increased its bottom line by earning $3.79 versus $3.08 in the prior year. This year, the market expects an improvement in earnings ($3.83 versus $3.79).
- Net operating cash flow has slightly increased to -$2,764.00 million or 8.65% when compared to the same quarter last year. Despite an increase in cash flow, STATE STREET CORP's cash flow growth rate is still lower than the industry average growth rate of 38.50%.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
State Street Corporation, a financial holding company, provides various financial products and services to institutional investors worldwide. The company has a P/E ratio of 11.3, above the average banking industry P/E ratio of 11.2 and below the S&P 500 P/E ratio of 17.7. State Street has a market cap of $19.83 billion and is part of the
industry. Shares are up 3.4% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.