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NEW YORK (TheStreet) -- Republic Airways (RJET) stock is plunging by 13.81% to $3.12 in late-morning trading on Tuesday following a downgrade to "hold" from "buy" at Deutsche Bank this morning.

The firm cut its price target to $4 from $8 on the stock.

There is a downside risk to Deutsche Bank's per-share earnings estimates as the company undergoes a restructuring, the firm said in a note.

Republic Airways is renegotiating contracts with its major airlines partners American Airlines (AAL), Delta Air Lines (DAL)and United Continental (UAL), as well as with other suppliers and vendors, regarding the future "size and shape" of the company, Deutsche Bank notes.

Based in Indianapolis, Republic Airways offers scheduled passenger services through its wholly owned operating air carrier subsidiaries.

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The company has fixed-fee code-share agreements with United Continental, Delta Air Lines and American Airlines.

Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate REPUBLIC AIRWAYS HLDGS INC as a Hold with a ratings score of C-. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.5%. Since the same quarter one year prior, revenues slightly dropped by 2.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 38.62% is the gross profit margin for REPUBLIC AIRWAYS HLDGS INC which we consider to be strong. Regardless of RJET's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, RJET's net profit margin of 0.85% is significantly lower than the industry average.
  • The debt-to-equity ratio is very high at 3.74 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, RJET has a quick ratio of 0.59, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Airlines industry and the overall market, REPUBLIC AIRWAYS HLDGS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • You can view the full analysis from the report here: RJET