NEW YORK (TheStreet) -- Shares of WABCO Holdings Inc. (WBC - Get Report) are up 2.13% to $95.21 in early morning trading after the company's rating was raised to "buy" from "hold" at Stifel, Nicolaus.
Stifel says it increased the electronic, mechanical and mechatronic products provider company to a "buy" rating because challenges in Europe and emerging markets have created a buying opportunity.
The firm set a price target of $111 for WABCO.
TheStreet Ratings team rates WABCO HOLDINGS INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate WABCO HOLDINGS INC (WBC) 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, notable return on equity, expanding profit margins and good cash flow from operations. 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 revenue growth came in higher than the industry average of 4.1%. Since the same quarter one year prior, revenues slightly increased by 8.4%. 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.
- WBC's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, WBC has a quick ratio of 1.83, which demonstrates the ability of the company to cover short-term liquidity needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Machinery industry and the overall market, WABCO HOLDINGS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- 35.02% is the gross profit margin for WABCO HOLDINGS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.20% is above that of the industry average.
- Net operating cash flow has increased to $116.80 million or 26.81% when compared to the same quarter last year. In addition, WABCO HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of -24.48%.
- You can view the full analysis from the report here: WBC Ratings Report