NEW YORK ( TheStreet) -- Heartland Financial USA Inc (Nasdaq: HTLF) 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:
- HEARTLAND FINANCIAL USA INC 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, HEARTLAND FINANCIAL USA INC increased its bottom line by earning $1.12 versus $0.07 in the prior year. This year, the market expects an improvement in earnings ($1.35 versus $1.12).
- 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 100.3% when compared to the same quarter one year prior, rising from $5.10 million to $10.22 million.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Commercial Banks industry and the overall market, HEARTLAND FINANCIAL USA INC's return on equity is below that of both the industry average and the S&P 500.
- HTLF has underperformed the S&P 500 Index, declining 8.54% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.