NEW YORK (TheStreet) -- Union First Market Bankshares (UBSH) has been downgraded to "neutral" from "buy," Sterne Agee said Tuesday. The firm said its revision was due to lower expected loan and mortgage growth.
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Separately, TheStreet Ratings team rates UNION FIRST MARKET BANKSHARS as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate UNION FIRST MARKET BANKSHARS (UBSH) 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 expanding profit margins, good cash flow from operations 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 gross profit margin for UNION FIRST MARKET BANKSHARS is currently very high, coming in at 88.78%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.38% is above that of the industry average.
- Net operating cash flow has significantly increased by 219.06% to $18.41 million when compared to the same quarter last year. Despite an increase in cash flow of 219.06%, UNION FIRST MARKET BANKSHARS is still growing at a significantly lower rate than the industry average of 430.57%.
- Compared to its closing price of one year ago, UBSH's share price has jumped by 34.08%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- UNION FIRST MARKET BANKSHARS's earnings per share declined by 13.5% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, UNION FIRST MARKET BANKSHARS increased its bottom line by earning $1.38 versus $1.37 in the prior year. This year, the market expects an improvement in earnings ($1.62 versus $1.38).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 11.8%. Since the same quarter one year prior, revenues slightly dropped by 7.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: UBSH Ratings Report