Grifols SA Stock Upgraded (GRFS)

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) -- Grifols (Nasdaq: GRFS) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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Highlights from the ratings report include:
  • Powered by its strong earnings growth of 55.39% and other important driving factors, this stock has surged by 45.07% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
  • GRIFOLS SA reported significant earnings per share improvement 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. During the past fiscal year, GRIFOLS SA increased its bottom line by earning $0.96 versus $0.18 in the prior year. This year, the market expects an improvement in earnings ($1.63 versus $0.96).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 46.1% when compared to the same quarter one year prior, rising from $84.59 million to $123.61 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 15.9%. Since the same quarter one year prior, revenues rose by 14.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Biotechnology industry and the overall market, GRIFOLS SA's return on equity exceeds that of both the industry average and the S&P 500.

Grifols, S.A., a specialty biopharmaceutical company, develops, manufactures, and distributes a range of plasma derivative products primarily in the European Union, Spain, the United States, and Canada. Grifols has a market cap of $13.88 billion and is part of the health care sector and drugs industry. Shares are up 13.3% year to date as of the close of trading on Thursday.

You can view the full Grifols Ratings Report or get investment ideas from our investment research center.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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