The firm said it lowered its rating on the company, which manufactures a variety of specialized products and components for the communications, energy, engineered systems, and orienting and identification industries, based on its "outsized exposure to oil and gas."
"With [around] 30% of earnings into related markets, our best case scenario is now negative enough to establish a well enough below consensus estimate to act on a relative ratings change," JPMorgan said.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
JPMorgan lowered its price target on Dover Corp. stock to $73 from $86.
Separately, TheStreet Ratings team rates DOVER CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate DOVER CORP (DOV) 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, increase in stock price during the past year and expanding profit margins. 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:
- DOV's revenue growth has slightly outpaced the industry average of 2.8%. Since the same quarter one year prior, revenues slightly increased by 7.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.69, 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 1.47, which illustrates the ability to avoid short-term cash problems.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Machinery industry and the overall market, DOVER CORP's return on equity exceeds that of both the industry average and the S&P 500.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- 41.98% is the gross profit margin for DOVER CORP which we consider to be strong. Regardless of DOV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DOV's net profit margin of 11.07% compares favorably to the industry average.
- You can view the full analysis from the report here: DOV Ratings Report