Will FMC Technologies (FTI) Stock Be Hurt By This Ratings Downgrade?

NEW YORK (TheStreet) -- FMC Technologies Inc. (FTI) was downgraded to "market perform" from "outperform" at FBR Capital Markets (FBRC) on Tuesday.

The firm said it lowered its rating on the company, which designs, manufacturers and services systems and products, including subsea production and processing systems, based on its belief growth in the company's subsea processing sector may miss expectations.

FBR Capital cut its price target on FMC Technologies to $58 from $68.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Separately, TheStreet Ratings team rates FMC TECHNOLOGIES INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate FMC TECHNOLOGIES INC (FTI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, 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 shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • FMC TECHNOLOGIES INC reported significant earnings per share improvement 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, FMC TECHNOLOGIES INC increased its bottom line by earning $2.10 versus $1.78 in the prior year. This year, the market expects an improvement in earnings ($2.80 versus $2.10).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 115.1% when compared to the same quarter one year prior, rising from $105.20 million to $226.30 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 19.3%. Since the same quarter one year prior, revenues rose by 16.2%. Growth in the company's revenue appears to have helped boost 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. When compared to other companies in the Energy Equipment & Services industry and the overall market, FMC TECHNOLOGIES INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Despite currently having a low debt-to-equity ratio of 0.50, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.01 is sturdy.
  • You can view the full analysis from the report here: FTI Ratings Report

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