NEW YORK (TheStreet) -- Shares of National CineMedia, Inc. (NCMI) are higher today by 4.13% to 15.62 following an upgrade at JPMorgan this morning to "overweight" from "neutral" with a $17 year end price target.
"With the stock down 21% YTD vs. the S&P +2%, we again view shares as attractive at 11.7x our 2014 adj. EBITDA and 11.0x 2015 (within historical avg. valuation levels), and paying a very attractive dividend yielding 5.9% that provides downside protection, in our view," the firm said in a note.
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TheStreet Ratings team rates NATIONAL CINEMEDIA INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate NATIONAL CINEMEDIA INC (NCMI) 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 revenue growth, expanding profit margins and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- NCMI's revenue growth has slightly outpaced the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 5.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The gross profit margin for NATIONAL CINEMEDIA INC is rather high; currently it is at 68.54%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.48% is above that of the industry average.
- NATIONAL CINEMEDIA INC reported significant earnings per share improvement 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, NATIONAL CINEMEDIA INC increased its bottom line by earning $0.71 versus $0.24 in the prior year. For the next year, the market is expecting a contraction of 24.6% in earnings ($0.54 versus $0.71).
- In its most recent trading session, NCMI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- Net operating cash flow has decreased to $39.20 million or 20.64% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, NATIONAL CINEMEDIA INC has marginally lower results.
- You can view the full analysis from the report here: NCMI Ratings Report