Update (9:35 a.m.): Updated with Thursday market open information.
NEW YORK (TheStreet) -- Oppenheimer initiated coverage on Vector Group (VGR) with an "overweight" rating and a $25 price target. Vector Group recently increased its stake in realty company Douglas Elliman, and the stock has 23% potential upside.
The stock was up 0.99% to $20.14 at 9:34 a.m. on Thursday.
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Separately, TheStreet Ratings team rates VECTOR GROUP LTD as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate VECTOR GROUP LTD (VGR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and growth in earnings per share. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- VGR's very impressive revenue growth greatly exceeded the industry average of 3.1%. Since the same quarter one year prior, revenues leaped by 78.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Tobacco industry. The net income increased by 253.5% when compared to the same quarter one year prior, rising from -$1.68 million to $2.58 million.
- Powered by its strong earnings growth of 257.89% and other important driving factors, this stock has surged by 34.64% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- 47.09% is the gross profit margin for VECTOR GROUP LTD which we consider to be strong. Regardless of VGR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VGR's net profit margin of 1.05% is significantly lower than the industry average.
- Net operating cash flow has significantly decreased to -$39.08 million or 294.11% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: VGR Ratings Report