) to hold from buy.
Analyst John Barnes says his downgrade of the supply chain management company is based primarily on valuation, as UTI traded Friday at his $25 target. He notes as the company approaches the best-in-class status in the logistics space, the stock's valuation gap with competitors will continue to narrow, but he sees no catalysts for near-term stock appreciation.
Barnes thinks UTI and the logistics sector looks expensive -- especially since operating leverage is inherent in the variable cost and the non-asset based logistics business model doesn't provide leverage to drive significant earnings growth. He adds, however, that UTI remains an attractive long-term investment. Barnes sees $1.08 for fiscal 2003 (Jan).