NEW YORK (TheStreet) -- Shares of Con-way Inc (CNW) are falling 3.42% to $51.70 in early-market trading after the freight transportation company was downgraded to "neutral" from "outperform" at Robert W. Baird today.
Analysts at the firm cited incremental risk from both investor sentiment and visibility to the pace of margin improvement for its cut in rating.
RW Baird set a $55 price target on shares of Con-way.
Separately, TheStreet Ratings team rates CON-WAY INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CON-WAY INC (CNW) 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 compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Road & Rail industry average. The net income increased by 25.1% when compared to the same quarter one year prior, rising from $42.90 million to $53.67 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.8%. Since the same quarter one year prior, revenues slightly increased by 8.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.63, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, CNW has a quick ratio of 1.55, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $126.19 million or 16.37% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -2.15%.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: CNW Ratings Report
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