NEW YORK (TheStreet) --Shares of Lamar Advertising Co. (LAMR) are lower -1.19% to $50.75 in pre-market trading on Friday after the company's rating was downgraded to "neutral" from "outperform" at Wedbush Securities.
The firm downgraded the outdoor advertising company's rating based on a valuation call and maintained its $57 price target.
TheStreet Ratings team rates LAMAR ADVERTISING CO as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate LAMAR ADVERTISING CO (LAMR) a BUY. This is driven by a few notable 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, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- LAMR's revenue growth has slightly outpaced the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 4.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- LAMAR ADVERTISING CO has improved earnings per share by 37.5% 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. We feel that this trend should continue. During the past fiscal year, LAMAR ADVERTISING CO increased its bottom line by earning $0.41 versus $0.10 in the prior year. This year, the market expects an improvement in earnings ($1.01 versus $0.41).
- 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 Media industry average. The net income increased by 41.1% when compared to the same quarter one year prior, rising from $7.22 million to $10.19 million.
- The gross profit margin for LAMAR ADVERTISING CO is rather high; currently it is at 66.50%. 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 3.17% trails the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Media industry and the overall market, LAMAR ADVERTISING CO's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: LAMR Ratings Report