) to neutral from buy.
Analyst William Steele tells MarketScope after a 27% run inthe stock in the last two days, the shares trade above his $14 target. Steele says investors should no way interpret the downgrade as a change in his view on the company's new product initiatives, as he has greater confidence in these after seeing management. Applica makes electric products such as small househould appliances, personal care products, and pet products.
However, with the stock now trading at 18 times his 2004 earnings per share estimate, it's difficult for him to argue that investors should put new money into the stock. He says he would feel more comfortable increasing his target multiple assumptions only. Steele raised the 72 cents 2004 earnings per share estimate to 79 cents, and upped the 82 cents 2005 earnings per share to 95 cents.