NEW YORK ( TheStreet) -- Avon Products (NYSE: AVP) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- Net operating cash flow has increased to $421.60 million or 15.82% when compared to the same quarter last year. Despite an increase in cash flow, AVON PRODUCTS's average is still marginally south of the industry average growth rate of 16.49%.
- The gross profit margin for AVON PRODUCTS is rather high; currently it is at 63.40%. Regardless of AVP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AVP's net profit margin of 0.00% significantly underperformed when compared to the industry average.
- AVON PRODUCTS 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. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, AVON PRODUCTS reported lower earnings of $1.20 versus $1.36 in the prior year. This year, the market expects an improvement in earnings ($1.49 versus $1.20).
- AVP, with its decline in revenue, slightly underperformed the industry average of 1.0%. Since the same quarter one year prior, revenues slightly dropped by 4.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
-- Written by a member of TheStreet RatingsStaff