NEW YORK (TheStreet) -- Signature Bank (SBNY) has been downgraded to "perform" from "outperform," Oppenheimer said Thursday. The firm said it was a valuation call as the stock is up 20% year-to-date and trading at 21x expected full-year earnings.
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Separately, TheStreet Ratings team rates SIGNATURE BANK/NY as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate SIGNATURE BANK/NY (SBNY) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 11.8%. Since the same quarter one year prior, revenues rose by 16.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- SIGNATURE BANK/NY has improved earnings per share by 27.6% 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, SIGNATURE BANK/NY increased its bottom line by earning $4.77 versus $3.91 in the prior year. This year, the market expects an improvement in earnings ($5.79 versus $4.77).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Commercial Banks industry average. The net income increased by 28.3% when compared to the same quarter one year prior, rising from $50.13 million to $64.34 million.
- The gross profit margin for SIGNATURE BANK/NY is currently very high, coming in at 81.50%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 30.25% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 58.65% to $208.93 million when compared to the same quarter last year. Despite an increase in cash flow of 58.65%, SIGNATURE BANK/NY is still growing at a significantly lower rate than the industry average of 430.57%.
- You can view the full analysis from the report here: SBNY Ratings Report