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"We rate LOEWS CORP (L) 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 good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- LOEWS CORP's earnings per share declined by 42.7% 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, LOEWS CORP increased its bottom line by earning $1.80 versus $1.43 in the prior year. This year, the market expects an improvement in earnings ($2.55 versus $1.80).
- Net operating cash flow has increased to $915.00 million or 10.77% when compared to the same quarter last year. Despite an increase in cash flow, LOEWS CORP's cash flow growth rate is still lower than the industry average growth rate of 33.90%.
- L, with its decline in revenue, underperformed when compared the industry average of 21.9%. Since the same quarter one year prior, revenues slightly dropped by 2.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The share price of LOEWS CORP has not done very well: it is down 11.74% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Insurance industry. The net income has significantly decreased by 26.2% when compared to the same quarter one year ago, falling from $282.00 million to $208.00 million.
- You can view the full analysis from the report here: L Ratings Report