NEW YORK ( TheStreet) -- Concha y Toro Winery (NYSE: VCO) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, reasonable valuation levels, growth in earnings per share and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins. 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 Beverages industry. The net income increased by 91.0% when compared to the same quarter one year prior, rising from $24.18 million to $46.19 million.
- VINA CONCHA Y TORO SA reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, VINA CONCHA Y TORO SA increased its bottom line by earning $2.61 versus $2.43 in the prior year. For the next year, the market is expecting a contraction of 95.8% in earnings ($0.11 versus $2.61).
- VCO, with its decline in revenue, slightly underperformed the industry average of 4.3%. Since the same quarter one year prior, revenues slightly dropped by 2.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Beverages industry and the overall market, VINA CONCHA Y TORO SA's return on equity is below that of both the industry average and the S&P 500.
-- Written by a member of TheStreet RatingsStaff