Zacks Investment Research downgraded
) to a Zacks Rank #5 (Strong Sell) on Jun 5, 2014. Going by the
Zacks model, companies holding a Zacks Rank #5 have strong chances
of performing worse than the broader market.
Why the Downgrade?
The American Depository Receipt (ADR) price of Arkema S.A. has
slipped 2.7% since the company reported lackluster financial
results for first-quarter 2014. In local currency, the company's
adjusted net income decreased 2.7% year over year with earnings per
share down by 9.7%.
The top-line result was weak as revenues generated declined 2.6%
year over year. Volume gains were 3.3%, offset by 2.6% and 2.1% of
negative impact from price movement and currency translation
respectively, along with 1.2% loss from miscellaneous sources.
Arkema's earnings before interest, tax, depreciation and
amortization (EBITDA) declined 9.0% year over year while EBITDA
margin fell 100 basis points.
The disappointing results triggered a downward revision in earnings
estimates. Over the last 30 days, the Zacks Consensus Estimate of
Arkema S.A. has declined 4.7% to $7.99 per ADR for 2014 and 2.1% to
$9.60 per ADR for 2015. Unsubstantial results and lowered earnings
estimates have made investors skeptical about Arkema's financial
performance in the quarters ahead.
Other Stocks to Consider
Arkema S.A. has a $6.4 billion market capitalization. Some
better-ranked stocks in the chemical industry include
Compass Minerals International Inc.
Koninklijke DSM N.V.
). While Compass Minerals sports a Zacks Rank #1 (Strong Buy), both
Koninklijke DSM and PetroLogistics carry a Zacks Rank #2 (Buy).
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