NEW YORK ( TheStreet) -- NBT Bancorp Inc (Nasdaq: NBTB) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins, growth in earnings per share and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:
  • The gross profit margin for N B T BANCORP INC is currently very high, coming in at 79.90%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 18.30% is above that of the industry average.
  • N B T BANCORP INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, N B T BANCORP INC increased its bottom line by earning $1.67 versus $1.54 in the prior year. This year, the market expects an improvement in earnings ($1.71 versus $1.67).
  • 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. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, N B T BANCORP INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • NBTB has underperformed the S&P 500 Index, declining 14.34% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • Net operating cash flow has decreased to $19.01 million or 25.92% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

NBT Bancorp Inc., a financial holding company, provides commercial banking and financial services to individuals, corporations, and municipalities in central and upstate New York, northeastern Pennsylvania, and the greater Burlington, Vermont area. The company has a P/E ratio of 11.5, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. NBT has a market cap of $650.7 million and is part of the financial sector and banking industry. Shares are down 17.8% year to date as of the close of trading on Monday.

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