Bank of America (BAC) Upgrades StanCorp (SFG) to Neutral (Update)

Update (9:41 a.m.): Updated with Thursday market open information.

NEW YORK (TheStreet) -- Bank of America  (BAC) upgraded StanCorp  (SFG) to "neutral" from "underperform" after the company raised its guidance. Bank of America set a target price of $68.

StanCorp was rising 6.22% to $66.44 shortly after the market opened on Thursday.

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Separately, TheStreet Ratings team rates STANCORP FINANCIAL GROUP INC as a "buy" with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate STANCORP FINANCIAL GROUP INC (SFG) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and attractive valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Although SFG's debt-to-equity ratio of 0.26 is very low, it is currently higher than that of the industry average.
  • Powered by its strong earnings growth of 30.69% and other important driving factors, this stock has surged by 69.04% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SFG should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • STANCORP FINANCIAL GROUP INC has improved earnings per share by 30.7% 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 year. We feel that this trend should continue. During the past fiscal year, STANCORP FINANCIAL GROUP INC increased its bottom line by earning $3.12 versus $3.04 in the prior year. This year, the market expects an improvement in earnings ($5.05 versus $3.12).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, STANCORP FINANCIAL GROUP INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 8.8%. Since the same quarter one year prior, revenues slightly dropped by 1.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: SFG Ratings Report

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