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Wells Fargo Downgrades Harman International to ‘Market Perform’

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Price movement

Harman International Industries (HAR) has a market cap of $7.7 billion. It fell 0.24% to close at $109.74 per share on December 9, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 0.25%, 28.9%, and 18.6%, respectively, on the same day.

HAR is trading 2.3% above its 20-day moving average, 19.8% above its 50-day moving average, and 32.7% above its 200-day moving average.

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Related ETF and peers

The Guggenheim Raymond James SB-1 Equity ETF (RYJ) invests 0.73% of its holdings in HAR. The YTD price movement of RYJ was 21.2% on December 9.

The market caps of HAR’s competitors are as follows:

  • Delphi Automotive (DLPH): $20.0 billion
  • Lear (LEA): $9.8 billion

Harman’s rating

On December 9, 2016, Wells Fargo downgraded Harman International Industries to “market perform” from “outperform.”

Performance of Harman International in fiscal 1Q17

Harman International Industries (HAR) reported fiscal 1Q17 net sales of ~$1.8 billion, a rise of 7.9% compared to ~$1.6 billion in fiscal 1Q16. Sales of Connected Car, Lifestyle Audio, and Connected Services rose 5.6%, 19.3%, and 4.4%, respectively, in fiscal 1Q17 compared to fiscal 1Q16. Sales of Professional Solutions fell 2.8% in fiscal 1Q17 compared to fiscal 1Q16.

The company’s gross profit margin and operating margin rose 90 basis points and 50 basis points, respectively, in fiscal 1Q17 compared to fiscal 1Q16.

HAR’s net income and EPS (earnings per share) rose to $103.1 million and $1.45, respectively, in fiscal 1Q17, compared to $87.1 million and $1.20, respectively, in fiscal 1Q16. It reported adjusted EPS of $1.87 in fiscal 1Q17, a rise of 26.4% compared to fiscal 1Q16.

Harman’s cash and cash equivalents fell 15.0%, and its inventories rose 17.8% in fiscal 1Q17 compared to fiscal 4Q16. Its current ratio and debt-to-equity ratio fell to 1.57x and 1.46x, respectively, in fiscal 1Q17 compared to 1.59x and 1.47x, respectively, in fiscal 4Q16.

Next, we’ll take a look at Coty (COTY).

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