Icahn Enterprises LP Stock Downgraded (IEP)

NEW YORK ( TheStreet) -- Icahn (Nasdaq: IEP) 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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally poor debt management and disappointing return on equity.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 119.01% to $85.00 million when compared to the same quarter last year. Despite an increase in cash flow of 119.01%, ICAHN ENTERPRISES LP is still growing at a significantly lower rate than the industry average of 36201.84%.
  • ICAHN ENTERPRISES LP 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 not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, ICAHN ENTERPRISES LP increased its bottom line by earning $8.12 versus $2.15 in the prior year.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Auto Components industry and the overall market, ICAHN ENTERPRISES LP'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 Auto Components industry. The net income has significantly decreased by 79.6% when compared to the same quarter one year ago, falling from $240.00 million to $49.00 million.

Icahn Enterprises L.P., through its subsidiaries, engages in investment management, automotive, gaming, railcar, food packaging, metals, real estate, and home fashion businesses in the United States and internationally. The company has a P/E ratio of 5.8, below the average real estate industry P/E ratio of 6.7 and below the S&P 500 P/E ratio of 17.7. Icahn has a market cap of $4.06 billion and is part of the financial sector and real estate industry. Shares are up 5.5% year to date as of the close of trading on Tuesday.

You can view the full Icahn Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.