UPDATE: Global Hunter Securities Downgrades Hyster-Yale (HY) to Neutral

Global Hunter Securities downgraded Hyster-Yale Materials Handling (NYSE: HY) from Spec. Buy to Neutral with a price target of $81 (from $88). Analyst Michael Shlisk expects flattish near-term growth.

"We are reducing our rating on HY to Neutral, from Speculative Buy, after the stock moved within 10% of our prior price target; in addition, in light of management's revised outlook for lower net income YoY in 2015, we are reducing our price target to $81 (from $88)," said Shlisk.

"Overall, Q3 adjusted EPS of $1.70 was above our estimate of $1.43 and consensus of $1.47. Revenues were $696MM in the quarter vs. our estimate of $678MM and consensus of $670MM. While the beat for the quarter was certainly a positive, 2015 adjusted operating income is expected to be flat vs. 2014, though sales are expected to increase, and net income is expected to decline (we were forecasting double-digit increases for both). Overall, while we note that some of the margin headwinds are coming from strategic initiatives to generate volume growth, given the near-term pricing and margin challenges we would wait to see a sustained period of double-digit incremental margins before getting more constructive on HY. The time frame for this to take place is 2016 at the earliest. In the meantime, we believe there are both upside risks and downside risks that move us to the sidelines," he added.

For an analyst ratings summary and ratings history on Hyster-Yale Materials Handling click here. For more ratings news on Hyster-Yale Materials Handling click here.

Shares of Hyster-Yale Materials Handling closed at $80.10 yesterday.

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