NEW YORK (TheStreet) -- Shares of Actavis (ACT) are up 0.56% to $224.30 as Goldman Sachs (GS) reinstated coverage with a "conviction buy" and a $228. price target for the specialty pharmaceutical company
Separately, TheStreet Ratings team rates ACTAVIS PLC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate ACTAVIS PLC (ACT) 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, 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 generally higher debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 5.6%. Since the same quarter one year prior, revenues rose by 40.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 169.62% and other important driving factors, this stock has surged by 81.75% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- ACTAVIS PLC 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, ACTAVIS PLC swung to a loss, reporting -$5.43 versus $0.75 in the prior year. This year, the market expects an improvement in earnings ($13.62 versus -$5.43).
- ACT's debt-to-equity ratio of 0.91 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that ACT's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.62 is low and demonstrates weak liquidity.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Pharmaceuticals industry and the overall market, ACTAVIS PLC'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: ACT Ratings Report