Granite Construction downgraded to "underperform"

Analyst downgrades Granite Construction stock, citing weakening market share

• On 12:46 pm EDT, Monday September 21, 2009

NEW YORK (AP) -- Shares of Granite Construction Co. fell Monday after an analyst cut his rating on shares of the civil contractor and producer of construction materials because he believes it is not getting enough new business.

BMO Capital Markets analyst Avram Fisher downgraded the stock to "underperform" from "outperform," saying "the competitive environment for low-bid, public construction projects is negatively affecting the company's (California state transportation department) market share and overall project win rate."

Fisher, who also cut his price target to $27 from $36, added that increased personal spending could offset the benefit of government stimulus spending.

The analyst cut his 2009 earnings-per-share forecast to $1.65 from $2.25 and his 2010 earnings-per-share forecast to $1.95 from $2.45.

Analysts polled by Thomson Reuters expect, on average, $1.79 and $2.01, respectively.

In afternoon trading, Granite Construction's shares fell $1.55, or 4.6 percent, to $32.26. In the last 12 months the stock has ranged from $21.20 to $50.