The firm said it raised its rating on the producer of specialty materials and chemicals as it believes Ferro will be able to generate strong earnings growth over the course of the next several years.
Keybanc set a $20 price target on Ferro stock.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 FERRO CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate FERRO CORP (FOE) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 350.00% and other important driving factors, this stock has surged by 52.98% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 567.5% when compared to the same quarter one year prior, rising from -$2.13 million to $9.96 million.
- FOE, with its decline in revenue, underperformed when compared the industry average of 7.6%. Since the same quarter one year prior, revenues slightly dropped by 7.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for FERRO CORP is currently lower than what is desirable, coming in at 30.67%. Regardless of FOE's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.38% trails the industry average.
- The debt-to-equity ratio of 1.22 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, FOE's quick ratio is somewhat strong at 1.13, demonstrating the ability to handle short-term liquidity needs.
- You can view the full analysis from the report here: FOE Ratings Report