NEW YORK (TheStreet) -- Shares of NCR (NCR) are gaining by 0.52% to $30.82 in today's morning trading session after analysts at RBC Capital Markets increased their price target to $36 from $33, and reiterated an 'outperform' rating.
Based in Georgia, NCR is a technology company that provides solutions and services to customers worldwide.
"We believe two of three key factors for near-term stock performance are improving--expectations and execution, while the third (messaging) is neutral to positive," analysts said.
While the retail segment has been underperforming over the past several quarters, analysts believe that it could be poised to improve throughout the year by order conversion and modestly improving capex cycles for major U.S. retailers, they noted.
Separately, TheStreet Ratings team rates NCR CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate NCR CORP (NCR) 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. Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly increased by 400.00% to $75.00 million when compared to the same quarter last year. In addition, NCR CORP has also vastly surpassed the industry average cash flow growth rate of 48.86%.
- The revenue fell significantly faster than the industry average of 33.3%. Since the same quarter one year prior, revenues slightly dropped by 2.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- NCR CORP's earnings per share declined by 25.8% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, NCR CORP reported lower earnings of $1.06 versus $2.67 in the prior year. This year, the market expects an improvement in earnings ($2.65 versus $1.06).
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Computers & Peripherals industry and the overall market, NCR CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The gross profit margin for NCR CORP is currently lower than what is desirable, coming in at 31.64%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.71% significantly trails the industry average.
- You can view the full analysis from the report here: NCR Ratings Report