Morgan Stanley downgraded Stillwater Mining (SWC) to equal-weight from overweight and upgraded Nucor (NUE) on expected benefits from a 10% contract price increase.
Analyst Wayne Atwell says his downgrade of Stillwater reflects his concerns over the company's repeated failure to meet production and cost targets. Atwell says the 11-cent third quarter earnings per share (reported Oct. 28) missed his 16-cent estimate and the consensus of 13 cents due to lower tonnage, lower grade and higher costs. He notes the company lowered the 670,000-ounce 2002 platinum-group metals production target to 640,000 ounces. He also cut the 88-cent 2002 estimate to 69 cents, and cut the $1.12 2003 estimate to 71 cents. He cut the $2.13 2004 target to 92 cents. He cut the $14 target to $8.