Markets & Finance

Analyst Actions: Ceradyne, National Penn Bancshares, RTI Biologics


From Standard & Poor's Equity ResearchMORGAN JOSEPH DOWNGRADES CERADYNE TO HOLD FROM BUY

Morgan Joseph analyst Michael French says Ceradyne (CRDN) won't ship any of its new X-SAPI body armor in the fourth quarter 2008 as a result of a contract protest by a competitor.

French says the ink on CRDN's previous $72 million body armor order was barely dry before the Army told the company to stop work; a competitor is believed to have complained that it didn't have opportunity to update its delivery schedule. He notes that CRDN might have made shipments by yearend, but instead the Army decided to start from scratch and seek new bids from suppliers.

He cuts $4.04 2008 EPS estimate to $3.99 and $3.17 for 2009 to $2.30.

SANDLER O'NEILL KEEPS SELL ON NATIONAL PENN BANCSHARES

Sandler O'Neill analyst Avi Barak says National Penn Bancshares (NPBC) announced preliminary fourth quarter results, including $60-$65 million other-than-temporary impairment (OTTI) charge related to the company's pooled trust preferred portfolio, $17-$20 million loan loss provision, $4.5 million charge related to accounting irregularities.

Barak lowers fourth quarter 2008 estimate to $0.34 loss to reflect OTTI charge and higher-than-expected provision. He is pleased that the company is dealing with securities portfolio issues, but is concerned about higher level of provisioning.

While he views NPBC as a well-run bank, he keeps sell rating based on valuation (261% of tangible book value).

ROTH CUTS RTI BIOLOGICS TO HOLD FROM BUY

Roth analyst Matt Dolan says he believes RTI Biologics (RTIX) has been hit by a tough global economy that has impacted distribution in nearly every product category, as demand softens and distributors appear to be tightening inventory.

Specifically, Dolan says the company's global dental business and general international distribution have experienced weaker-than-expected demand. He also notes Sports Medicine has been hurt by the company shift to its own direct sales reps in certain territories. He says Spine & Surgical group has been hit by inventory reductions by distributors.

He cuts his price target to $3.


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