Bear Stearns downgraded Pacer International (PACR ) to peer perform from outperform, explaining that the stock has grown more expensive this year.
Analyst Ed Wolfe says Pacer stock (now at around $27 per share) is within 10% of his 2006 price target. The shares rose 27.2% year to date vs. 4.3% for the S&P 500. Wolfe says that while Pacer has continued to have room for improvement in earnings per share, its cash flow expectations during 2005 have crept upward slowly, driven mostly by earnings. He says his thesis on Pacer has not changed, but he sees a less advantageous reward/risk scenario for buying the stock, given its price appreciation during 2005.