NEW YORK (TheStreet) -- Exterran Holdings (EXH) stock has been upgraded to "outperform" from "sector perform," Howard Weil said Monday. The firm allocated a $52 price target, noting the company is leveraged to a pronounced turn in industry fundamentals.
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Separately, TheStreet Ratings team rates EXTERRAN HOLDINGS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate EXTERRAN HOLDINGS INC (EXH) a BUY. This is driven by multiple 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 good cash flow from operations, expanding profit margins, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. 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:
- Net operating cash flow has significantly increased by 136.97% to $53.89 million when compared to the same quarter last year. In addition, EXTERRAN HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of 49.49%.
- 36.31% is the gross profit margin for EXTERRAN HOLDINGS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.02% trails the industry average.
- Compared to its closing price of one year ago, EXH's share price has jumped by 50.05%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- EXTERRAN HOLDINGS INC's earnings per share declined by 20.0% 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, EXTERRAN HOLDINGS INC turned its bottom line around by earning $0.89 versus -$1.68 in the prior year. This year, the market expects an improvement in earnings ($1.11 versus $0.89).
- The revenue fell significantly faster than the industry average of 11.2%. Since the same quarter one year prior, revenues fell by 20.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: EXH Ratings Report