NEW YORK (TheStreet) -- Jefferies initiated coverage on TD Ameritrade (AMTD) with a "hold" rating and a $34 price target. The firm said core earnings power is understated as a result of lower interest rates.
The stock closed at $31.10 on Friday.
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Separately, TheStreet Ratings team rates TD AMERITRADE HOLDING CORP as a "buy" with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate TD AMERITRADE HOLDING CORP (AMTD) 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 revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 5.1%. Since the same quarter one year prior, revenues rose by 19.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Capital Markets industry and the overall market, TD AMERITRADE HOLDING CORP's return on equity exceeds that of both the industry average and the S&P 500.
- 45.28% is the gross profit margin for TD AMERITRADE HOLDING CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.80% is above that of the industry average.
- Net operating cash flow has increased to -$266.00 million or 42.17% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 15.20%.
- TD AMERITRADE HOLDING CORP has improved earnings per share by 34.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TD AMERITRADE HOLDING CORP increased its bottom line by earning $1.22 versus $1.06 in the prior year. This year, the market expects an improvement in earnings ($1.38 versus $1.22).
- You can view the full analysis from the report here: AMTD Ratings Report