Why Tupperware (TUP) Was Downgraded

Story updated at 9:45 a.m. to reflect market activity.

NEW YORK (TheStreet) -- Tupperware (TUP) was downgraded to "hold" from "buy" by Argus Friday.

Tuooerware fell 1.2% to $78.44 in morning trading.

The downgrade follows a disappointing fourth-quarter earnings report. The company says it expects to see growth in emerging markets. Argus, however, says the company is seeing weakness in key international markets.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

-------------

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

"We rate TUPPERWARE BRANDS CORP (TUP) a BUY. This is driven by some important positives, 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 impressive record of earnings per share growth, revenue growth, notable return on equity, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

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

  • TUPPERWARE BRANDS CORP has improved earnings per share by 29.9% 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. During the past fiscal year, TUPPERWARE BRANDS CORP increased its bottom line by earning $5.18 versus $3.43 in the prior year. This year, the market expects an improvement in earnings ($5.60 versus $5.18).
  • TUP's revenue growth trails the industry average of 28.7%. Since the same quarter one year prior, revenues slightly increased by 0.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 Household Durables industry and the overall market, TUPPERWARE BRANDS CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has slightly increased to $197.50 million or 5.50% when compared to the same quarter last year. Despite an increase in cash flow, TUPPERWARE BRANDS CORP's average is still marginally south of the industry average growth rate of 8.63%.
  • The gross profit margin for TUPPERWARE BRANDS CORP is rather high; currently it is at 66.34%. Regardless of TUP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TUP's net profit margin of 12.50% compares favorably to the industry average.
  • You can view the full analysis from the report here: TUP Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

More from Markets

Stocks Rise Sharply, Facebook Ignites a Nasdaq Rally

Stocks Rise Sharply, Facebook Ignites a Nasdaq Rally

Jim Cramer: Visa Is a Technology Company That Masquerades as a Financial Company

Jim Cramer: Visa Is a Technology Company That Masquerades as a Financial Company

Jim Cramer: Chipotle Shares Are Probably Done Going Down

Jim Cramer: Chipotle Shares Are Probably Done Going Down

Jim Cramer: This Is a Sad Time for Southwest Airlines

Jim Cramer: This Is a Sad Time for Southwest Airlines

Jim Cramer Just Spoke to Larry Kudlow About the China Trade Negotiations

Jim Cramer Just Spoke to Larry Kudlow About the China Trade Negotiations