Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- Central Pacific Financial Corporation (NYSE: CPF) 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, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Commercial Banks industry and the overall market, CENTRAL PACIFIC FINANCIAL CP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- CPF's share price has surged by 29.48% over the past year, reflecting the market's general trend, despite their weak earnings growth during the last quarter. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- The gross profit margin for CENTRAL PACIFIC FINANCIAL CP is currently very high, coming in at 102.95%. Regardless of CPF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CPF's net profit margin of 21.48% compares favorably to the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.7%. Since the same quarter one year prior, revenues slightly dropped by 0.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- CENTRAL PACIFIC FINANCIAL CP's earnings per share declined by 7.7% 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 year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, CENTRAL PACIFIC FINANCIAL CP reported lower earnings of $1.13 versus $5.35 in the prior year. This year, the market expects an improvement in earnings ($1.23 versus $1.13).