Agilent Technologies (A) Downgraded From Buy to Hold

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NEW YORK (TheStreet) -- Agilent Technologies  (A) has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C+.  TheStreet Ratings Team has this to say about their recommendation:

"We rate AGILENT TECHNOLOGIES INC (A) 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 revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."

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

  • A's revenue growth trails the industry average of 22.3%. 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 current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, A has a quick ratio of 2.08, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for AGILENT TECHNOLOGIES INC is rather high; currently it is at 57.87%. A has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.32% trails the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Life Sciences Tools & Services industry average. The net income has decreased by 12.5% when compared to the same quarter one year ago, dropping from $168.00 million to $147.00 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Life Sciences Tools & Services industry and the overall market, AGILENT TECHNOLOGIES INC'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: A Ratings Report

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