NEW YORK (TheStreet) -- Citigroup downgraded Taminco (TAM) to "neutral" from "buy" and set a $25 price target. The firm said the company could be leveraged to weaker guidance from others in the agriculture business.
The stock closed at $22.84 on Tuesday.
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Separately, TheStreet Ratings team rates TAMINCO CORP as a "sell" with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate TAMINCO CORP (TAM) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, poor profit margins and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Currently the debt-to-equity ratio of 1.97 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, TAM maintains a poor quick ratio of 0.75, which illustrates the inability to avoid short-term cash problems.
- The gross profit margin for TAMINCO CORP is currently lower than what is desirable, coming in at 27.27%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.13% trails that of the industry average.
- Net operating cash flow has decreased to $27.00 million or 44.89% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- Compared to other companies in the Chemicals industry and the overall market, TAMINCO CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The stock price has risen over the past year, but it has underperformed the S&P 500 so far. Regardless of the rise in share value over the previous year, we feel that the risks involved in investing in this stock do not compensate for any future upside potential.
- You can view the full analysis from the report here: TAM Ratings Report