Will IHS Stock be Hurt Today by This Price Target Decrease?

NEW YORK (TheStreet) --Analysts at Barclays lowered their price target on IHS Inc. (IHS) to $128 from $135 on Tuesday morning, but maintained their 'equal weight' rating on the stock.

IHS operates as a source of information, insight, and analytics in industries such as energy, natural resources, technology, healthcare, chemicals, aerospace, defense, automotive, and maritime.

The firm said it reduced its price target on the company as IHS is leveraged to lower oil prices.

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"Given pressure in energy, we believe upside is limited without large mergers and acquisitions," Barclays said.

Separately, TheStreet Ratings team rates IHS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate IHS INC (IHS) 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 robust revenue growth, compelling growth in net income, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. 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:

  • IHS's revenue growth has slightly outpaced the industry average of 5.8%. Since the same quarter one year prior, revenues rose by 15.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Professional Services industry. The net income increased by 99.1% when compared to the same quarter one year prior, rising from $23.36 million to $46.52 million.
  • The gross profit margin for IHS INC is rather high; currently it is at 60.29%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.36% is above that of the industry average.
  • Net operating cash flow has significantly increased by 101.28% to $167.48 million when compared to the same quarter last year. In addition, IHS INC has also vastly surpassed the industry average cash flow growth rate of 24.70%.
  • IHS INC reported significant earnings per share improvement 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, IHS INC reported lower earnings of $1.97 versus $2.36 in the prior year. This year, the market expects an improvement in earnings ($5.78 versus $1.97).
  • You can view the full analysis from the report here: IHS Ratings Report

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