Piper Jaffray Downgrades Astec Industries (ASTE) to Neutral; Cuts Target to $35

September 5, 2008 8:28 AM EDT

Piper Jaffray downgrades Astec Industries (Nasdaq: ASTE) from Buy to Neutral and lowers its price target from $48 to $35.

The firm cites a recent state survey by the Department of Transportation offices that suggest a sharp decline in paving miles could dampen earnings at Astec. Piper believes the slowdown can be attributed to "tight budgets and rising asphalt costs." Furthermore, Piper sees higher steel input costs as possibly putting downward pressure on Astec's margins in the near-term, despite the efforts to introduce price increases.

While Piper does expect international growth to remain strong, the firm believes investors could begin to discount "growth in developing economies in anticipation of an eventual slowdown."

Piper lowered its FY08 and FY09 EPS estimates from $2.83 and $3.25 to $2.76 and $2.94, respectively. The Street estimates are currently $2.83 for FY08 and $3.02 for FY09.

Astec Industries, Inc. provides equipment and components used primarily in road building, utility, and related construction activities in the United States and internationally.

Related Categories

Downgrades

Stocks Mentioned

Related Entities

• Piper Jaffray
• Raising Prices

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?