UBS Piper Downgrades Huffy to 'Market Perform'
USB Piper downgraded Huffy (HUF ) to market perform from outperform.
Analyst Anthony Gikas says sales of key products, including backboards, action sports, and in-line skates continue to fall short of expectations, and will remain a challenge into 2004 as categories lack momentum.
He says conservative retail buying patterns have pressured Huffy's close-out business, and he thinks mass merchants are focused on lower-margin front-line products. Additionally, he thinks Huffy may have greater back-office challenges than he previously thought.
Gikas cut the 37 cents 2003 earnings per share estimate to 8 cents, and trimmed the 50 cents 2004 estimate to 25 cents. He also reduced the price target, to $5 from $7.