DA Davidson Cuts Price Target on Powell Industries (POWL), Market Checks Indicate Weak Margins

DA Davidson is maintaining its Neutral rating on shares of Powell Industries (NASDAQ: POWL), but is lowering its price target from $42 to $36.

The firm highlights that POWL has recently acquired new work contracts which improves the company's revenue visibility in 2012. However, following comments form other companies within the industry, DA Davidson doesn't expect that the new contracts will be that accretive to earnings due to such weak margins and bidding wars within the industry.

The company typically releases it new outlook in December and the firm is really looking forward to it as it could "test current Street views on expectations for the next fiscal year."

DA Davidson reports that they can not be positive on the company due to, "Volatility in commodities and in general equity markets present ongoing risks for these shares. Potential slowing economic activity which further delays capital investments in industrial projects is of particular concern. The recent unexpected exit of Pat McDonald also leaves the company without a permanent CEO, raising questions regarding strategic direction at Powell."

For more ratings news on Powell Industries click here and for the rating history of Powell Industries click here.

Shares of Powell Industries closed at $31.81 yesterday.

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