NEW YORK (
-- UMB Financial Corporation
) 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, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and disappointing return on equity.
Highlights from the ratings report include:
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, UMBF has underperformed the S&P 500 Index, declining 8.26% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- 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 Commercial Banks industry. The net income has decreased by 20.2% when compared to the same quarter one year ago, dropping from $23.86 million to $19.03 million.
- UMB FINANCIAL CORP's earnings per share declined by 20.3% 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, UMB FINANCIAL CORP increased its bottom line by earning $2.26 versus $2.20 in the prior year. This year, the market expects an improvement in earnings ($2.43 versus $2.26).
- Net operating cash flow has significantly increased by 109.88% to $41.09 million when compared to the same quarter last year. In addition, UMB FINANCIAL CORP has also vastly surpassed the industry average cash flow growth rate of -666.30%.
- UMBF's revenue growth has slightly outpaced the industry average of 3.6%. Since the same quarter one year prior, revenues slightly increased by 5.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
UMB Financial Corporation, a multi-bank holding company, provides banking and other financial services in the United States. The company has a P/E ratio of 16.6, equal to the average banking industry P/E ratio and above the S&P 500 P/E ratio of 16.2. UMB Financial has a market cap of $1.5 billion and is part of the
industry. Shares are down 9.9% year to date as of the close of trading on Monday.
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