NEW YORK (TheStreet) -- Shares of CIT Group (CIT - Get Report) were gaining 1.7% to $40.55 after-hours Wednesday after the credit services company announced a reshuffling of its senior management, including the retirement of CEO John Thain.
Thain will retire from the role of CEO on March 31, 2016, and will continue to serve as the chairman of the company's board of directors. Board member Ellen R. Alemany will join the company's management team as Vice Chairman on November 1, and will take over as CEO after Thain retires.
CIT Group also announced that Corporate Controller Carol Hayes will become CFO on November 1. Hayes will replace CFO Scott Parker, whose departure was announced on Monday.
Separately, CIT Group announced a series of strategic initiatives designed to advance is transition to a U.S. Commercial Bank, including the sale of its CIT Canada and CIT China businesses, and the exploration of alternatives for its $10 billion Commercial Air business.
TheStreet Ratings team rates CIT GROUP INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
We rate CIT GROUP INC (CIT) a BUY. This is driven by multiple strengths, 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 notable return on equity and expanding profit margins. We feel its 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:
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, CIT GROUP INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- The gross profit margin for CIT GROUP INC is rather high; currently it is at 66.29%. Regardless of CIT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 12.88% trails the industry average.
- CIT, with its decline in revenue, slightly underperformed the industry average of 3.6%. Since the same quarter one year prior, revenues slightly dropped by 3.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- CIT GROUP INC's earnings per share declined by 35.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CIT GROUP INC increased its bottom line by earning $5.73 versus $3.19 in the prior year. For the next year, the market is expecting a contraction of 50.1% in earnings ($2.86 versus $5.73).
- The share price of CIT GROUP INC has not done very well: it is down 6.80% 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, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
- You can view the full analysis from the report here: CIT