The firm said it lowered its rating on the company, which manufactures and distributes products for commercial, industrial, and consumer markets, as TriMas reduced its 2014 full year earnings guidance, and is expecting lower sales and margins.
Wells Fargo cut its price target range on the stock to $28-$31 from $40-$43.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
"We rate TRIMAS CORP (TRS) a BUY. This is driven by some important positives, 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 4.1%. Since the same quarter one year prior, revenues slightly increased by 6.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in 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. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.06, which illustrates the ability to avoid short-term cash problems.
- TRIMAS CORP's earnings per share declined by 10.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TRIMAS CORP increased its bottom line by earning $1.83 versus $0.92 in the prior year. This year, the market expects an improvement in earnings ($2.17 versus $1.83).
- 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 Machinery industry and the overall market, TRIMAS CORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: TRS Ratings Report