Friday, KeyBanc Capital downgraded Colfax Corp. (CFX) shares to Hold from Buy.
Analyst Jeffrey Hammond downgraded the stock following recent share price performance. The analyst continues to like the long-term story at CFX, underpinned by its exposure to attractive end markets with solid long-term growth fundamentals and leading market share positions.
That said, shares have staged a solid recovery over the past several months, up 53% since the analyst's June 26 upgrade vs. S&P 500 +19%, S&P Midcap + 23%, and he believes current valuation levels represent a less compelling entry point.
Additionally, the analyst believes that a maturing power generation cycle and lingering uncertainty regarding the timing of commercial marine deliveries, off a strong industry backlog, pose an element of earnings risk in 2010 despite what he believes is fairly healthy near-term activity.
The analyst believes CFX's current backlog and order momentum, excluding cancellations in Commercial Marine, should position the company for a solid second half of 2009. However, the analyst would look for greater visibility into 2010 before becoming more constructive. As a result, the analyst believes shares will remain range-bound from here pending further clarity and downgraded the stock to Hold.
Currently, CFX is down $0.33 or 2.75% and trading at $11.67.
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