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) -- Credicorp (NYSE: BAP) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share and expanding profit margins. However, as a counter to these strengths, we find that the stock itself is trading at a premium valuation.
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- The revenue growth greatly exceeded the industry average of 3.7%. Since the same quarter one year prior, revenues rose by 37.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CREDICORP LTD has improved earnings per share by 5.9% 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CREDICORP LTD increased its bottom line by earning $9.90 versus $8.89 in the prior year. This year, the market expects an improvement in earnings ($11.10 versus $9.90).
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- 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. In comparison to the other companies in the Commercial Banks industry and the overall market, CREDICORP LTD's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
-- Written by a member of TheStreet Ratings Staff