Will This Upgrade Help TD Ameritrade (AMTD) Stock Today?

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

NEW YORK (TheStreet) -- TD Ameritrade (AMTD) was upgraded to "outperform" from "market perform" by Bernstein Monday.

TD Ameritrade gained 0.1% to $32.66 in morning trading.

The firm set a $40 price target for the company. TD Ameritrade is leveraged to the retail investors' return to market according to Bernstein analysts.

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

"We rate TD AMERITRADE HOLDING CORP (AMTD) 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, expanding profit margins, impressive record of earnings per share growth, compelling growth in net income and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

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

  • The revenue growth greatly exceeded the industry average of 10.4%. Since the same quarter one year prior, revenues rose by 19.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 45.28% is the gross profit margin for TD AMERITRADE HOLDING CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.80% is above that of the industry average.
  • TD AMERITRADE HOLDING CORP has improved earnings per share by 34.6% 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, TD AMERITRADE HOLDING CORP increased its bottom line by earning $1.22 versus $1.06 in the prior year. This year, the market expects an improvement in earnings ($1.44 versus $1.22).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Capital Markets industry average. The net income increased by 34.7% when compared to the same quarter one year prior, rising from $144.00 million to $194.00 million.
  • Powered by its strong earnings growth of 34.61% and other important driving factors, this stock has surged by 66.01% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp 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 other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: AMTD Ratings Report

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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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