NEW YORK (TheStreet) -- Avon Products (AVP - Get Report) stock is higher by 3.58% to $3.62 in afternoon trading after surging nearly 10% earlier today on the possibility that media proprietor Oprah Winfrey might be taking a stake in the company.
Avon declined to comment, CNN Money reports.
Earlier this year, Avon stock soared following a fake takeover bid, CNN Money adds, noting that shareholders have reason to be wary of rumors.
Investors are likely hoping that Oprah would be able to do with Avon what she did for Weight Watchers (WTW). In October, Oprah disclosed a 10% stake in Weight Watchers (WTW) and the stock skyrocketed 90% immediately thereafter.
Shares of Avon are down 62.99% year-to-date.
Based in New York City, Avon is a manufacturer and marketer of beauty and related products.
Separately, TheStreet Ratings team rates AVON PRODUCTS as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
We rate AVON PRODUCTS (AVP) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 Personal Products industry. The net income has significantly decreased by 862.6% when compared to the same quarter one year ago, falling from $91.40 million to -$697.00 million.
- Net operating cash flow has significantly decreased to $13.20 million or 90.06% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 66.09%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 852.38% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- AVON PRODUCTS 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 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, AVON PRODUCTS reported poor results of -$0.88 versus -$0.01 in the prior year. This year, the market expects an improvement in earnings ($0.12 versus -$0.88).
- The revenue fell significantly faster than the industry average of 13.2%. Since the same quarter one year prior, revenues fell by 22.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: AVP