Franklin Electric shares fall on analyst downgrade

Franklin Electric shares fall as analyst downgrades company on stock value

• On 12:33 pm EDT, Thursday September 24, 2009

HARTFORD, Conn. (AP) -- Shares of Franklin Electric Co. Inc., which makes systems and components for water and automotive fuel movement, fell Thursday as an analyst reduced his rating on the stock, saying it was adequately valued.

KeyBanc analyst Matt J. Summerville downgraded the Bluffton, Ind., company to "hold" from "buy."

He also cut his 2009 and 2010 profit estimates.

Franklin Electric's shares have been nearing his $35 price target and his reduced estimates "make it challenging to argue that the stock is poised for additional multiple expansion beyond current levels," he said.

Summerville cut his 2009 earnings estimate for Franklin Electric to $1.47 per share from $1.75 per share. He also cut his 2010 estimate to $1.95 per share from $2.10 per share.

Analysts surveyed by Thomson Reuters expect, on average, earnings of $1.54 per share this year and $1.91 per share for 2010.

Summerville said his reduced estimates are primarily due to his belief that Franklin Electric's fueling systems business could be "meaningfully less than anticipated" in the second half of 2009 as station owners in California appear to be delaying required installation of vapor management systems.

Franklin Electric's shares fell $2.07, or 6.5 percent, to $30.03 in afternoon trading.