NEW YORK ( TheStreet) -- Constellation Energy Group (NYSE: CEG) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and poor profit margins. Highlights from the ratings report include:
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- CONSTELLATION ENERGY GRP INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, CONSTELLATION ENERGY GRP INC continued to lose money by earning -$1.71 versus -$4.89 in the prior year. This year, the market expects an improvement in earnings ($2.38 versus -$1.71).
- The gross profit margin for CONSTELLATION ENERGY GRP INC is currently extremely low, coming in at 3.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -20.10% is significantly below that of the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Independent Power Producers & Energy Traders industry. The net income has significantly decreased by 452.3% when compared to the same quarter one year ago, falling from $168.10 million to -$592.20 million.
-- Written by a member of TheStreet Ratings Staff