Will This Analyst Downgrade Hurt Duke Energy (DUK) Stock Today? (Update)

Update (9:40 a.m.): Updated with Thursday market open information.

NEW YORK (TheStreet) -- Barclays downgraded Duke Energy  (DUK) to "equal weight" from "overweight" and set a $77 price target. Macro and operational factors drove the firm's decision.

The stock was down 0.68% to $73.32 at 9:39 a.m. on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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Separately, TheStreet Ratings team rates DUKE ENERGY CORP as a "buy" with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate DUKE ENERGY CORP (DUK) 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 impressive record of earnings per share growth, revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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

  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.3%. Since the same quarter one year prior, revenues slightly increased by 7.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • DUKE ENERGY CORP reported significant earnings per share improvement 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, DUKE ENERGY CORP increased its bottom line by earning $3.73 versus $3.06 in the prior year. This year, the market expects an improvement in earnings ($4.55 versus $3.73).
  • Net operating cash flow has increased to $1,392.00 million or 10.03% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -1.11%.
  • The debt-to-equity ratio is somewhat low, currently at 0.99, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.42 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • 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. When compared to other companies in the Electric Utilities industry and the overall market, DUKE ENERGY CORP's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: DUK Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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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