Astoria Financial Corporation Stock Downgraded (AF)

NEW YORK ( TheStreet) -- Astoria Financial Corporation (NYSE: AF) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The gross profit margin for ASTORIA FINANCIAL CORP is rather high; currently it is at 53.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 6.60% is above that of the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 25.7%. Since the same quarter one year prior, revenues fell by 17.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has significantly decreased to -$0.66 million or 101.06% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • ASTORIA FINANCIAL CORP 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, ASTORIA FINANCIAL CORP reported lower earnings of $0.71 versus $0.79 in the prior year. For the next year, the market is expecting a contraction of 25.4% in earnings ($0.53 versus $0.71).
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Astoria Financial Corporation operates as the bank holding company for Astoria Federal Savings and Loan Association that provides various banking and financial products and services in the United States. It engages in generating deposits and originating loans. The company has a P/E ratio of 12.6, above the average banking industry P/E ratio of 11 and below the S&P 500 P/E ratio of 17.7. Astoria Financial has a market cap of $911.5 million and is part of the financial sector and banking industry. Shares are up 2.8% year to date as of the close of trading on Monday.

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