NEW YORK ( TheStreet) -- Molson Coors Brewing Company (NYSE: TAP.A) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- MOLSON COORS BREWING CO's earnings per share declined by 6.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, MOLSON COORS BREWING CO reported lower earnings of $3.57 versus $3.92 in the prior year. This year, the market expects an improvement in earnings ($3.67 versus $3.57).
- 49.90% is the gross profit margin for MOLSON COORS BREWING CO which we consider to be strong. Regardless of TAP.A's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TAP.A's net profit margin of 23.90% compares favorably to the industry average.
- TAP.A's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.10, which illustrates the ability to avoid short-term cash problems.
- TAP.A's revenue growth trails the industry average of 18.8%. Since the same quarter one year prior, revenues slightly increased by 5.7%. 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.