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Apogee Enterprises slides on downgrade to 'Sell'

Post Time:Mar 11,2009Classify:Company NewsView:374

Shares of Apogee Enterprises Inc. diverged from the broader markets' rush upward, dropping by more than 3 percent after an analyst said the slowdown in commercial construction would weigh on the glass products maker.

Piper Jaffray (nyse: PJC - news - people ) analyst Michael Cox downgraded the Minneapolis-based company to 'Sell' from 'Neutral' and cut his 12-month price target on the stock by 45 percent to $6.

Apogee stock slid 3.3 percent, or 28 cents, to $8.14 in midday trading. Broader market indexes were all up by 4 percent or more.

Apogee, which makes energy-efficient window and storefront glass for commercial buildings in North America, will start to see a sharp drop in projects as the commercial real estate market continues to suffer from collapsed credit markets, Cox said. He sees office construction rising to more than 40 percent of Apogee's project backlog, which could spell revenue problems for the company in the next two years as office vacancy rates increase under the recession.

Cox has an earnings-per-share estimate of $1.70 for the 2009 fiscal year, compared to the company's guidance of $1.65 to $1.82 per share from continuing operations for the year ended in February.

He sees profit declining to 75 cents per share in 2010 and 53 cents per share in 2011.
 

Source: Associated PressAuthor: shangyi

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