Story updated at 10 a.m. to reflect market activity.
First Niagara fell 1.8% to $9.21 in morning trading.
Barclays analysts warned that First Niagara's stock could prove to be a value trap. First Niagara stock fell 9.8% year-to-date, though it gained 4.9% in the past six months.
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Separately, TheStreet Ratings team rates FIRST NIAGARA FINANCIAL GRP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate FIRST NIAGARA FINANCIAL GRP (FNFG) 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 revenue growth, compelling growth in net income, expanding profit margins, impressive record of earnings per share growth and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 12.1%. Since the same quarter one year prior, revenues slightly increased by 6.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Commercial Banks industry average. The net income increased by 27.1% when compared to the same quarter one year prior, rising from $61.10 million to $77.69 million.
- The gross profit margin for FIRST NIAGARA FINANCIAL GRP is currently very high, coming in at 84.59%. Regardless of FNFG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FNFG's net profit margin of 19.46% compares favorably to the industry average.
- FIRST NIAGARA FINANCIAL GRP has improved earnings per share by 33.3% 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, FIRST NIAGARA FINANCIAL GRP increased its bottom line by earning $0.75 versus $0.40 in the prior year. For the next year, the market is expecting a contraction of 4.0% in earnings ($0.72 versus $0.75).
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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: FNFG Ratings Report