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Deutsche Bank Lowers UTI Worldwide to 'Hold'


Deutsche Bank downgraded UTI Worldwide (UTIW) to hold from buy.

Analyst John Barnes says his downgrade of the supply chain management company is based primarily on valuation, as UTI traded Friday at his $25 target. He notes as the company approaches the best-in-class status in the logistics space, the stock's valuation gap with competitors will continue to narrow, but he sees no catalysts for near-term stock appreciation.

Barnes thinks UTI and the logistics sector looks expensive -- especially since operating leverage is inherent in the variable cost and the non-asset based logistics business model doesn't provide leverage to drive significant earnings growth. He adds, however, that UTI remains an attractive long-term investment. Barnes sees $1.08 for fiscal 2003 (Jan).


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