NEW YORK (TheStreet) -- Shares of Turquoise Hill Resources (TRQ) were falling 2.1% to $4.03 on heavy trading volume Thursday after TD Securities downgraded the Vancouver-based mining company to "hold" from "speculative buy."
The analyst firm raised its price target for Turquoise Hill Resources to C$5 from C$4.50. TD analyst Craig Hutchison said the downgrade was a result of the recent price appreciation of the company's stock.
"We continue to formally expect a resolution with the Government of Mongolia sometime in H2/15 and the resumption of underground development in 2016," Hutchison wrote. "In the interim, we continue to expect the company to generate solid free cash flow in 2015, supported by strong production and low cash costs at OT."
About 4.1 million shares of Turquoise Hill Resources were traded by 2:33 p.m. Thursday, above the company's average trading volume of about 2.9 million shares a day.
TheStreet Ratings team rates TURQUOISE HILL RESOURCES LTD as a Sell with a ratings score of E+. TheStreet Ratings Team has this to say about their recommendation:
"We rate TURQUOISE HILL RESOURCES LTD (TRQ) a SELL. This is based on several weak investment measures, which should drive this stock to significantly underperform the majority of stocks that we rate. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share and relatively poor performance when compared with the S&P 500 during the past year."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TURQUOISE HILL RESOURCES LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, TURQUOISE HILL RESOURCES LTD reported lower earnings of $0.10 versus $0.18 in the prior year.
- In its most recent trading session, TRQ has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
- The change in net income from the same quarter one year ago has significantly exceeded that of the Metals & Mining industry average, but is less than that of the S&P 500. The net income has decreased by 19.4% when compared to the same quarter one year ago, dropping from $138.30 million to $111.41 million.
- TRQ has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, TRQ has a quick ratio of 1.73, which demonstrates the ability of the company to cover short-term liquidity needs.
- Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, TURQUOISE HILL RESOURCES LTD has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- You can view the full analysis from the report here: TRQ Ratings Report