Will This Downgrade Hurt Astoria Financial (AF) Today?

NEW YORK (TheStreet) -- Astoria Financial (AF) shares were downgraded to "sell" from "hold" by analysts at S&P Equity Research on Friday.

The firm lowered its price target to $13 from $14. 

Astoria Financial is down -1.7% to $12.85 in early market trading on Friday.

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Separately, TheStreet Ratings team rates ASTORIA FINANCIAL CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate ASTORIA FINANCIAL CORP (AF) a BUY. This is driven by several positive factors, 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 solid stock price performance, growth in earnings per share, reasonable valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

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

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 52.16% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AF should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • ASTORIA FINANCIAL CORP has improved earnings per share by 5.9% 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 year. We feel that this trend should continue. During the past fiscal year, ASTORIA FINANCIAL CORP increased its bottom line by earning $0.60 versus $0.55 in the prior year. This year, the market expects an improvement in earnings ($0.64 versus $0.60).
  • Net operating cash flow has significantly increased by 13078.57% to $43.61 million when compared to the same quarter last year. In addition, ASTORIA FINANCIAL CORP has also vastly surpassed the industry average cash flow growth rate of 81.69%.
  • The gross profit margin for ASTORIA FINANCIAL CORP is rather high; currently it is at 69.77%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 13.95% trails the industry average.
  • You can view the full analysis from the report here: AF Ratings Report
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