Will This Downgrade Hurt New York Community Bancorp (NYCB) Today?

Story updated at 10 a.m. to reflect market activity.

NEW YORK (TheStreet) --New York Community Bancorp (NYCB) was downgraded to "underweight" by JP Morgan Monday.

Shares of New York Community Bancorp fell 1.6% to $15.76 on morning trading.

The bank's analyst set a price target of $15 for the smaller bank. JP Morgan analysts say New York Community Bancorp is struggling to cover its dividend.

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Separately, TheStreet Ratings team rates NEW YORK CMNTY BANCORP INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate NEW YORK CMNTY BANCORP INC (NYCB) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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

  • The gross profit margin for NEW YORK CMNTY BANCORP INC is currently very high, coming in at 72.14%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 25.57% is above that of the industry average.
  • Net operating cash flow has increased to $47.30 million or 23.78% when compared to the same quarter last year. Despite an increase in cash flow of 23.78%, NEW YORK CMNTY BANCORP INC is still growing at a significantly lower rate than the industry average of 81.69%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The revenue fell significantly faster than the industry average of 26.3%. Since the same quarter one year prior, revenues slightly dropped by 6.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: NYCB 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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