NEW YORK ( TheStreet) -- Matthews International Corporation (Nasdaq: MATW) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share and attractive valuation levels. 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:
- MATW's revenue growth has slightly outpaced the industry average of 6.2%. Since the same quarter one year prior, revenues rose by 11.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- MATTHEWS INTL CORP has improved earnings per share by 6.0% 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, MATTHEWS INTL CORP increased its bottom line by earning $2.46 versus $2.31 in the prior year. This year, the market expects an improvement in earnings ($2.58 versus $2.46).
- 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 Diversified Consumer Services industry and the overall market on the basis of return on equity, MATTHEWS INTL CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Diversified Consumer Services industry average. The net income increased by 5.0% when compared to the same quarter one year prior, going from $19.72 million to $20.70 million.
- MATW has underperformed the S&P 500 Index, declining 5.49% 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.