NEW YORK ( TheStreet) -- LNB Bancorp (Nasdaq: LNBB) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- LNB BANCORP INC's earnings per share declined by 28.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, LNB BANCORP INC turned its bottom line around by earning $0.55 versus -$0.44 in the prior year. For the next year, the market is expecting a contraction of 7.3% in earnings ($0.51 versus $0.55).
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, LNB BANCORP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.9%. Since the same quarter one year prior, revenues slightly dropped by 3.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The gross profit margin for LNB BANCORP INC is rather high; currently it is at 68.70%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.30% trails the industry average.