Beam Inc Stock Upgraded (BEAM)

NEW YORK ( TheStreet) -- Beam (NYSE: BEAM) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels.
  • The gross profit margin for BEAM INC is rather high; currently it is at 57.20%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.80% trails the industry average.
  • BEAM INC has improved earnings per share by 10.9% 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, BEAM INC reported lower earnings of $1.19 versus $2.66 in the prior year. This year, the market expects an improvement in earnings ($2.35 versus $1.19).
  • The net income growth from the same quarter one year ago has exceeded that of the Beverages industry average, but is less than that of the S&P 500. The net income increased by 10.2% when compared to the same quarter one year prior, going from $85.40 million to $94.10 million.
  • BEAM, with its very weak revenue results, has greatly underperformed against the industry average of 12.6%. Since the same quarter one year prior, revenues plummeted by 62.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

Beam Inc. engages in producing and selling branded distilled spirits products worldwide. Beam has a market cap of $8.2 billion and is part of the consumer goods sector and food & beverage industry.

You can view the full Beam Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet RatingsStaff