Teekay Corporation Stock Upgraded (TK)
NEW YORK (TheStreet) -- Teekay Corporation (NYSE:TK) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- TK's revenue growth trails the industry average of 14.6%. Since the same quarter one year prior, revenues slightly increased by 2.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- 49.40% is the gross profit margin for TEEKAY CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 9.40% is above that of the industry average.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- TEEKAY CORP's earnings per share declined by 40.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, TEEKAY CORP reported poor results of -$5.28 versus -$3.68 in the prior year. This year, the market expects an improvement in earnings (-$0.67 versus -$5.28).
- 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 43.7% when compared to the same quarter one year ago, falling from $85.91 million to $48.35 million.
Teekay Corporation engages in the marine transportation of crude oil and gas in Bermuda and internationally. Teekay has a market cap of $2.48 billion and is part of the services sector and transportation industry. Shares are up 35.1% year to date as of the close of trading on Tuesday.