Editor's Note: 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. NEW YORK ( TheStreet) -- John Bean Technologies Corporation (NYSE: JBT) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- JOHN BEAN TECHNOLOGIES's earnings per share declined by 25.0% in the most recent quarter compared to 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, JOHN BEAN TECHNOLOGIES reported lower earnings of $1.06 versus $1.30 in the prior year. This year, the market expects an improvement in earnings ($1.24 versus $1.06).
- JBT, with its decline in revenue, underperformed when compared the industry average of 0.6%. Since the same quarter one year prior, revenues fell by 10.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Machinery industry and the overall market, JOHN BEAN TECHNOLOGIES's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- The gross profit margin for JOHN BEAN TECHNOLOGIES is currently lower than what is desirable, coming in at 28.30%. Regardless of JBT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.97% trails the industry average.
-- Written by a member of TheStreet Ratings Staff