NEW YORK (TheStreet) -- New York & Co (NWY) shares closed up 6.8% to $4.56 in trading on Tuesday.
The increase followed the retailer's shares being upgraded to "buy" from "neutral" by analysts at Janney Montgomery Scott.
The firm cited the retailers spring product line and potential margin expansion as reasons for the upgrade.
TheStreet Ratings team rates NEW YORK & CO INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate NEW YORK & CO INC (NWY) 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 largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, relatively poor performance when compared with the S&P 500 during the past year and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- NWY has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Despite the fact that NWY's debt-to-equity ratio is low, the quick ratio, which is currently 0.59, displays a potential problem in covering short-term cash needs.
- NEW YORK & CO INC's earnings per share declined by 35.3% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, NEW YORK & CO INC increased its bottom line by earning $0.05 versus $0.04 in the prior year. This year, the market expects an improvement in earnings ($0.15 versus $0.05).
- NWY, with its decline in revenue, slightly underperformed the industry average of 6.3%. Since the same quarter one year prior, revenues slightly dropped by 7.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- In its most recent trading session, NWY 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, 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, implying reduced upside potential.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Specialty Retail industry. The net income has significantly decreased by 33.8% when compared to the same quarter one year ago, falling from $10.48 million to $6.94 million.
- You can view the full analysis from the report here: NWY Ratings Report