NEW YORK (TheStreet) -- Centerpoint Energy (CNP) stock has been upgraded to "outperform," BMO Capital said Monday. The firm gave a $27 price target, noting the company offers a solid yield and growth at a reasonable price.
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Separately, TheStreet Ratings team rates CENTERPOINT ENERGY INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CENTERPOINT ENERGY INC (CNP) 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 revenue growth, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 7.7%. Since the same quarter one year prior, revenues rose by 32.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CENTERPOINT ENERGY INC has improved earnings per share by 26.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CENTERPOINT ENERGY INC reported lower earnings of $0.72 versus $0.96 in the prior year. This year, the market expects an improvement in earnings ($1.16 versus $0.72).
- The net income growth from the same quarter one year ago has exceeded that of the Multi-Utilities industry average, but is less than that of the S&P 500. The net income increased by 25.9% when compared to the same quarter one year prior, rising from $147.00 million to $185.00 million.
- In its most recent trading session, CNP has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- Currently the debt-to-equity ratio of 1.94 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, CNP maintains a poor quick ratio of 0.74, which illustrates the inability to avoid short-term cash problems.
- You can view the full analysis from the report here: CNP Ratings Report