Will This Citigroup Upgrade Help Meredith (MDP) Today? (Update)

Update (9:45 a.m.): Updated with Monday market open information.

NEW YORK (TheStreet) -- Citigroup upgraded Meredith  (MDP) to "buy" from "neutral" and set a $52 target price. The firm noted that Meredith would likely acquire Time, Inc.

The stock was rising 3.18% to $45.74 at 9:44 a.m. on Monday.

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

"We rate MEREDITH CORP (MDP) a BUY. This is driven by multiple 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 reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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

  • The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that MDP's debt-to-equity ratio is low, the quick ratio, which is currently 0.64, displays a potential problem in covering short-term cash needs.
  • The gross profit margin for MEREDITH CORP is rather high; currently it is at 62.66%. Regardless of MDP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.63% trails the industry average.
  • MDP, with its decline in revenue, slightly underperformed the industry average of 3.1%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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.
  • You can view the full analysis from the report here: MDP Ratings Report

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