AP News

Align Tech downgraded after reaching new high

NEW YORK (AP) — A Cantor Fitzgerald analyst downgraded shares of Align Technology Inc. Monday, citing the stock's gains over the last few months.

THE OPINION: Analyst Jeremy Feffer lowered his rating to "Hold" from "Buy." Shares of Align are trading around their all-time high, and Feffer said he is concerned about pricing trends, along with the shaky global economy and changes in currency exchange rates, which could hurt Align's sales overseas. Feffer said the company reported greater sales in the second quarter, but shipping volume is growing faster than its revenue because of discounts and other issues.

THE BIG PICTURE: The company, which makes Invisalign braces, noted in July that promotions and rebates, along with currency exchange rates, were going to hurt its revenue in the third quarter.

THE ANALYSIS: "Although we continue to believe in this story long term, the stock's risk/reward profile looks far less favorable to us than it did in the spring and early summer and would prefer to move to the sidelines until we have better clarity on some of these near-term risk factors," said Feffer.

The analyst has a price target of $37 per share on the stock.

THE STOCK: Shares of Align Technology lost 92 cents, or 2.4 percent, to $37.30 in afternoon trading, recovering a bit from an earlier drop of nearly 5 percent. The shares started the session up more than 20 percent since Align reported its second-quarter results on July 19, and on Thursday, the shares reached an all-time high of $39.82.

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