Will This Upgrade Help Cullen/Frost (CFR) Stock Today? (Update)

Update (9:35 a.m.): Updated with Tuesday market information.

NEW YORK (TheStreet) -- Sterne Agee upgraded Cullen/Frost (CFR)to "neutral" from "underperform" and set a $74 target price. The firm cited valuation as the reason for the move.

The stockwas up 0/37% to $77.82 at 9:35 a.m. on Tuesday.

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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 CULLEN/FROST BANKERS INC as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CULLEN/FROST BANKERS INC (CFR) 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, expanding profit margins, good cash flow from operations, solid stock price performance and increase in net income. 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 slightly increased by 2.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for CULLEN/FROST BANKERS INC is currently very high, coming in at 95.64%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 25.82% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 138.19% to $73.31 million when compared to the same quarter last year. Despite an increase in cash flow of 138.19%, CULLEN/FROST BANKERS INC is still growing at a significantly lower rate than the industry average of 405.62%.
  • The net income growth from the same quarter one year ago has exceeded that of the Commercial Banks industry average, but is less than that of the S&P 500. The net income increased by 4.0% when compared to the same quarter one year prior, going from $60.19 million to $62.57 million.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's 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 the other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: CFR 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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