NEW YORK (TheStreet) -- Shares of Harman International Industries Inc. (HAR) are up 1.60% to $107.35 on Tuesday morning after Pacific Crest initiated coverage on the company, which develops, manufactures, and markets audio products and electronic systems, with an "outperform" rating.
"We view [Harman International] as the premier play as the connected car goes more mainstream over the next several years," the firm said.
Pacific Crest gave the company a $139 price target which the firm based on its F2016 estimate of $6.96 per share.
TheStreet Ratings team rates HARMAN INTERNATIONAL INDS as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate HARMAN INTERNATIONAL INDS (HAR) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and solid stock price performance. 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:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Household Durables industry average. The net income increased by 50.8% when compared to the same quarter one year prior, rising from $47.49 million to $71.63 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 26.8%. Since the same quarter one year prior, revenues rose by 25.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- HAR's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.00, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has significantly increased by 143.76% to $120.88 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 93.88%.
- Powered by its strong earnings growth of 51.47% and other important driving factors, this stock has surged by 159.70% 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: HAR Ratings Report
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