Why Hecla Mining (HL) Shares Are Lower Today

NEW YORK (TheStreet) -- Shares of Hecla Mining Co.   (HL) are down 3.14, or 7.23%, as analyst have commented on the company. Moody's Investors Service downgraded the Corporate Family and Probability of Default Ratings of Hecla to B2 and B2-PD from B1 and B1-PD, respectively. Also, the senior unsecured notes rating was downgraded to B3 from B2. The outlook is Negative. The company's Speculative Grade Liquidity rating is unchanged at SGL-2. Approximately $500 million in rated debt is affected.

Earlier today, Zacks analysts downgraded Hecla to Underperform from Neutral. Currently, they have a price target of $3.20 on the stock.

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TheStreet Ratings team rates HECLA MINING CO as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate HECLA MINING CO (HL) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share."

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

  • The revenue growth greatly exceeded the industry average of 8.3%. Since the same quarter one year prior, revenues rose by 40.8%. 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.
  • The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, HL has a quick ratio of 1.66, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 36.69% is the gross profit margin for HECLA MINING CO which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, HL's net profit margin of -2.54% significantly underperformed when compared to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 491.4% when compared to the same quarter one year ago, falling from $0.74 million to -$2.91 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, HECLA MINING CO underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • You can view the full analysis from the report here: HL Ratings Report

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