Will This Target Price Decrease Hurt Northwest Pipe (NWPX) Today? (Update)

Update (9:40 a.m.): Updated with Monday market open information.

NEW YORK (TheStreet) -- Jefferies decreased its target price on Northwest Pipe  (NWPX) to $35, decreased its estimates and set a "hold" rating. The firm sees earnings recovery as more muted and notes WT quoting trends are weak and water market spending has been lackluster.

The stock was flat at 9:39 a.m. on Tuesday.

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

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

"We rate NORTHWEST PIPE CO (NWPX) 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 solid stock price performance, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and notable return on equity. 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:

  • Compared to its closing price of one year ago, NWPX's share price has jumped by 48.73%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, NWPX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • NWPX's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.18, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 468.02% to $8.20 million when compared to the same quarter last year. In addition, NORTHWEST PIPE CO has also vastly surpassed the industry average cash flow growth rate of 10.70%.
  • NORTHWEST PIPE CO has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NORTHWEST PIPE CO increased its bottom line by earning $1.72 versus $1.34 in the prior year. This year, the market expects an improvement in earnings ($1.82 versus $1.72).
  • NWPX, with its decline in revenue, underperformed when compared the industry average of 2.8%. Since the same quarter one year prior, revenues fell by 10.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: NWPX 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.

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.

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