NEW YORK (TheStreet) -- Shares of Lexmark International Inc. (LXK) are falling -5.68% to $46.63 after Bernstein downgraded the printer maker to "under perform" from "market perform," and cited valuation and challenging software margin targets.
Bernstein maintained its price target of $40 on the shares.
Separately, TheStreet Ratings team rates LEXMARK INTL INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate LEXMARK INTL INC (LXK) a BUY. This is driven by a few notable 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 solid stock price performance, reasonable valuation levels, expanding profit margins, notable return on equity and largely solid financial position with reasonable debt levels by most measures. 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:
- Compared to its closing price of one year ago, LXK's share price has jumped by 49.07%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- 46.43% is the gross profit margin for LEXMARK INTL INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, LXK's net profit margin of 3.33% significantly trails the industry average.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market on the basis of return on equity, LEXMARK INTL INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- LXK, with its decline in revenue, slightly underperformed the industry average of 2.4%. Since the same quarter one year prior, revenues slightly dropped by 1.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: LXK Ratings Report