SunTrust Robinson Humphrey Cuts Playtex Products to Neutral
SunTrust Robinson Humphrey downgraded Playtex Products (PYX ) to neutral from buy, explaining that the stock recently passed a $14 price target and now trades at a premium relative to its peers.
Analyst William Chappell believes the company's turnaround is on the right track and is encouraged by its recent divestitures of smaller brands, which enable Playtex to further de-lever its balance sheet and focus on larger brands. The analyst believes initiatives could represent as much as 10 cents in the upside to his 2006 earnings per share estimate, but much of that upside is already factored into stock price. He thinks more attractive opportunities exist for new money, especially given the pullback in the consumer products sector over the past three months.