) to neutral from underweight, explaining that the stock price already reflects longer-term concerns.
Analyst Constance Maneaty says the stock's valuation of 12.4 times her calendar year 2006 earnings per share estimate of $4.08 reflects factors such as inflation-related pressure on profit margins for the company's battery products. She says the shares are trading in line with their 3-year average valuation, but are down 22% from the historic high they had reached in August. She notes that operating profit growth should improve quarter over quarter, moving from a 7% drop in the first quarter to increases of 5% in the second quarter, 13% in the third quarter, and 18% in the fourth quarter of fiscal year 2006 (ending September.) She sees $3.90 fiscal year 2006 earnings per share.