NEW YORK (
-- State Street
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- STT's revenue growth has slightly outpaced the industry average of 1.5%. Since the same quarter one year prior, revenues slightly increased by 5.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- STATE STREET CORP has improved earnings per share by 17.6% 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, STATE STREET CORP reported lower earnings of $3.08 versus $3.47 in the prior year. This year, the market expects an improvement in earnings ($3.71 versus $3.08).
- Net operating cash flow has significantly decreased to -$3,026.00 million or 285.87% 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 company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Capital Markets industry and the overall market, STATE STREET CORP's return on equity is below that of both the industry average and the S&P 500.
State Street Corporation, through its subsidiaries, provides various financial services and products to the institutional investors worldwide. The company has a P/E ratio of 11, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. State Street has a market cap of $17.5 billion and is part of the
industry. Shares are down 29.5% year to date as of the close of trading on Friday.
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