NEW YORK ( TheStreet) -- POSCO (NYSE: PKX) 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, notable return on equity and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and poor profit margins. Highlights from the ratings report include:
- When compared to other companies in the Metals & Mining industry and the overall market, POSCO's return on equity is below that of both the industry average and the S&P 500.
- 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 Metals & Mining industry. The net income has significantly decreased by 75.3% when compared to the same quarter one year ago, falling from $3,698.29 million to $912.97 million.
- The gross profit margin for POSCO is currently extremely low, coming in at 14.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.40% significantly trails the industry average.
-- Written by a member of TheStreet Ratings Staff