The York, Pa.- based retailer has seen its stock estimates for the year rise 123% in the past month with an expected earnings growth in 2014 that is significantly higher than 2013's numbers. The stock has appreciated 16.8% so far in the month of March.
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Separately, TheStreet Ratings team rates BON-TON STORES INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate BON-TON STORES INC (BONT) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, generally disappointing historical performance in the stock itself and unimpressive growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio is very high at 6.76 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, BONT has underperformed the S&P 500 Index, declining 21.31% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The change in net income from the same quarter one year ago has exceeded that of the Multiline Retail industry average, but is less than that of the S&P 500. The net income has decreased by 17.6% when compared to the same quarter one year ago, dropping from $74.41 million to $61.34 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Multiline Retail industry and the overall market, BON-TON STORES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.2%. Since the same quarter one year prior, revenues slightly dropped by 9.6%. 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: BONT Ratings Report