NEW YORK ( TheStreet) -- UBS (NYSE: UBS) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, deteriorating net income, generally weak debt management, disappointing return on equity and feeble growth in its earnings per share.
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- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 36.31%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 66.66% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- 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 Capital Markets industry. The net income has significantly decreased by 70.8% when compared to the same quarter one year ago, falling from $1,380.98 million to $403.74 million.
- The debt-to-equity ratio is very high at 5.61 and currently higher than the industry average, implying that there is very poor management of debt levels within the company.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, UBS AG underperformed against that of the industry average and is significantly less than that of the S&P 500.
- UBS AG 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 reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, UBS AG reported lower earnings of $1.14 versus $2.09 in the prior year. This year, the market expects an improvement in earnings ($1.20 versus $1.14).
-- Written by a member of TheStreet Ratings Staff