NEW YORK (TheStreet) -- Shares of Celgene Corp. (CELG) are down -0.84% to $153.00 after J.P. Morgan (JPM) downgraded the stock to "neutral" from "overweight" and lowered its price target to $170. from $180.
In part, the firm said: "Good fundamentals but less upside potential...After being favorable on CELG shares for quite some time, we're now moving to a neutral rating...The change isn't reflective of a new fundamental concern; indeed, Celgene's growth rate is expected to be robust over the next few years."
Separately, TheStreet Ratings team rates CELGENE CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate CELGENE CORP (CELG) 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 robust revenue growth, notable return on equity, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
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 26.2%. Since the same quarter one year prior, revenues rose by 18.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- 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 Biotechnology industry and the overall market, CELGENE CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 51.67% to $557.10 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 18.30%.
- The gross profit margin for CELGENE CORP is currently very high, coming in at 96.58%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CELG's net profit margin of 16.16% significantly trails the industry average.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- You can view the full analysis from the report here: CELG Ratings Report