NEW YORK ( TheStreet) -- KB Financial Group (NYSE: KB) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, attractive valuation levels and expanding profit margins. 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:
- 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 268.6% when compared to the same quarter one year prior, rising from $85.12 million to $313.79 million.
- KB FINANCIAL GROUP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, KB FINANCIAL GROUP reported lower earnings of $0.23 versus $1.46 in the prior year. This year, the market expects an improvement in earnings ($6.20 versus $0.23).
- 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, KB FINANCIAL GROUP's return on equity is below that of both the industry average and the S&P 500.
- KB's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 41.33%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. 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.