) to hold from buy.
Analyst James Stone says the downgrade is due to the stock's valuation breaching his $31 12-month price target. He notes the stock has had a phenomenal run off its post-September 11 lows, more than doubling in last three months. Besides valuation concerns, he is concerned about the energy services company's EPS outlook given the continued slowdown in U.S. gas drilling, Canadian drilling, and spending by U.S. independent oil companies.
He notes that BJS is the company in the sector that's become most associated with U.S. gas prices. He remains concerned about the near-term outlook for gas prices, despite the arrival of winter. He sees EPS of $0.42 in the first quarter and $1.47 in FY 02 (Sept.).