NEW YORK (TheStreet) -- Sterne Agee upgraded Spirit AeroSystems (SPR) to "buy" from "neutral" and set a $43 price target. The firm said changes to the company's unprofitable Tulsa programs will result in a higher stock price.
The stock closed at $33.90 on Wednesday.
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Separately, TheStreet Ratings team rates SPIRIT AEROSYSTEMS HOLDINGS as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SPIRIT AEROSYSTEMS HOLDINGS (SPR) 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 revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 19.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 87.71% and other important driving factors, this stock has surged by 54.61% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although SPR had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- SPIRIT AEROSYSTEMS HOLDINGS reported significant earnings per share improvement 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, SPIRIT AEROSYSTEMS HOLDINGS swung to a loss, reporting -$4.40 versus $0.25 in the prior year. This year, the market expects an improvement in earnings ($2.89 versus -$4.40).
- The gross profit margin for SPIRIT AEROSYSTEMS HOLDINGS is rather low; currently it is at 17.56%. Regardless of SPR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SPR's net profit margin of 8.88% compares favorably to the industry average.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Aerospace & Defense industry and the overall market, SPIRIT AEROSYSTEMS HOLDINGS's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: SPR Ratings Report