Why National Bank Of Greece (NBG) Stock Is Down Thursday

NEW YORK (TheStreet) -- Shares of the National Bank of Greece (NBG) are down -12.72% to $3.02 on Thursday after Greece's statistics agency said the country's economy decline -1.1% for the first quarter of 2014 compared to the same period 2013 when the economy dropped -3.86%, according to a report from Emerging Markets.

The Greek economy is expected to show a growth of 0.6% this year, ekathimerini.com reported.

Separately, on Wednesday Standard & Poor's upgraded its rating on National Bank of Greece as well as three other major banks in Greece to "CCC+" from "CCC."

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The firm affirmed its short term rating at "C" and said outlook on the banks looks stable.

TheStreet Ratings team rates NATIONAL BANK OF GREECE as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate NATIONAL BANK OF GREECE (NBG) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

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

  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 71.54%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 87.77% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • NATIONAL BANK OF GREECE has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NATIONAL BANK OF GREECE turned its bottom line around by earning $1.98 versus -$27.80 in the prior year. For the next year, the market is expecting a contraction of 93.4% in earnings ($0.13 versus $1.98).
  • NBG, with its decline in revenue, slightly underperformed the industry average of 9.0%. Since the same quarter one year prior, revenues fell by 16.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 46.25% is the gross profit margin for NATIONAL BANK OF GREECE which we consider to be strong. Regardless of NBG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NBG's net profit margin of 39.31% significantly outperformed against the industry.
  • Net operating cash flow has significantly increased by 95.36% to -$61.40 million when compared to the same quarter last year. In addition, NATIONAL BANK OF GREECE has also vastly surpassed the industry average cash flow growth rate of -26.36%.
  • You can view the full analysis from the report here: NBG Ratings Report
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