NEW YORK (TheStreet) -- Prosperity Bancshares (PB) stock has been upgraded to "buy" from "neutral," Sterne Agee said Wednesday. The firm allocated a $71 price target, noting visibility is improving and the company can sustain above-average profitability.
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Separately, TheStreet Ratings team rates PROSPERITY BANCSHARES INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate PROSPERITY BANCSHARES INC (PB) 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 robust revenue growth, solid stock price performance, growth in earnings per share, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 2.9%. Since the same quarter one year prior, revenues rose by 26.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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.
- PROSPERITY BANCSHARES INC has improved earnings per share by 17.4% 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 two years. We feel that this trend should continue. During the past fiscal year, PROSPERITY BANCSHARES INC increased its bottom line by earning $3.64 versus $3.22 in the prior year. This year, the market expects an improvement in earnings ($4.18 versus $3.64).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Commercial Banks industry average. The net income increased by 36.2% when compared to the same quarter one year prior, rising from $49.31 million to $67.14 million.
- The gross profit margin for PROSPERITY BANCSHARES INC is currently very high, coming in at 93.79%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 37.39% is above that of the industry average.
- You can view the full analysis from the report here: PB Ratings Report