NEW YORK ( TheStreet) -- BP (NYSE: BP) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- BP's revenue growth has slightly outpaced the industry average of 37.4%. Since the same quarter one year prior, revenues rose by 37.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 132.8% when compared to the same quarter one year prior, rising from -$17,150.00 million to $5,620.00 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, BP PLC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- BP has underperformed the S&P 500 Index, declining 7.48% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The gross profit margin for BP PLC is currently extremely low, coming in at 13.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.50% trails that of the industry average.