NEW YORK ( TheStreet) -- Chemical Financial Corporation (Nasdaq: CHFC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • CHEMICAL FINANCIAL CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CHEMICAL FINANCIAL CORP increased its bottom line by earning $0.86 versus $0.42 in the prior year. This year, the market expects an improvement in earnings ($1.45 versus $0.86).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 151.3% when compared to the same quarter one year prior, rising from $4.39 million to $11.03 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Commercial Banks industry and the overall market, CHEMICAL FINANCIAL CORP's return on equity is below that of both the industry average and the S&P 500.
  • CHFC has underperformed the S&P 500 Index, declining 20.93% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

Chemical Financial Corporation operates as the holding company for Chemical Bank that offers commercial banking services in Michigan. The company has a P/E ratio of 12.5, below the average banking industry P/E ratio of 12.7 and below the S&P 500 P/E ratio of 17.7. Chemical Financial has a market cap of $463.5 million and is part of the financial sector and banking industry. Shares are down 26.5% year to date as of the close of trading on Monday.

You can view the full Chemical Financial Ratings Report or get investment ideas from our investment research center.

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