Will This Upgrade Help Buckle (BKE) Today?

NEW YORK (TheStreet) -- Janney Montgomery upgraded Buckle  (BKE) to "neutral" from "sell" with a $41 price target. The firm said the company is seeing higher comp sales. 

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

"We rate BUCKLE INC (BKE) a BUY. This is driven by several positive factors, 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and increase in stock price during the past year. 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:

  • BKE's revenue growth has slightly outpaced the industry average of 5.5%. Since the same quarter one year prior, revenues slightly increased by 0.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • BKE has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.45, which illustrates the ability to avoid short-term cash problems.
  • 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 Specialty Retail industry and the overall market, BUCKLE INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 46.83% is the gross profit margin for BUCKLE INC which we consider to be strong. Regardless of BKE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BKE's net profit margin of 14.15% compares favorably to the industry average.
  • BUCKLE INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, BUCKLE INC increased its bottom line by earning $3.44 versus $3.20 in the prior year. For the next year, the market is expecting a contraction of 2.3% in earnings ($3.36 versus $3.44).

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