Will This Downgrade Hurt Oshkosh (OSK) Stock Today?

Story updated at 9:55 a.m. to reflect market activity.

NEW YORK (TheStreet) -- Oshkosh (OSK) was downgraded to "neutral" by JPMorgan Monday.

Shares of Oshkosh were falling -1% to $46.76 in morning trading.

The analyst firm lowered its price target for the company to $49. JPMorgan analysts expect to see a mixed result in construction stocks such as Oshkosh.

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Separately, TheStreet Ratings team rates OSHKOSH CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate OSHKOSH CORP (OSK) a BUY. This is driven by several positive factors, 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 largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and increase in stock price during the past year. 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:

  • The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.17, which illustrates the ability to avoid short-term cash problems.
  • OSK, with its decline in revenue, slightly underperformed the industry average of 4.6%. Since the same quarter one year prior, revenues fell by 12.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • In its most recent trading session, OSK has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • OSHKOSH CORP's earnings per share declined by 26.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, OSHKOSH CORP increased its bottom line by earning $3.54 versus $2.67 in the prior year. For the next year, the market is expecting a contraction of 1.1% in earnings ($3.50 versus $3.54).
  • You can view the full analysis from the report here: OSK Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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