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Beacon Roofing falls after analyst downgrade

NEW YORK (AP) -- Shares of Beacon Roofing Supply fell Tuesday after an analyst downgraded the building materials distributor's stock.

THE SPARK: Analyst David Manthey of Robert W. Baird & Co. said that based on his research, prices and sales of shingles for homes have been weaker than expected in the last few weeks. He thinks that hurts Beacon's residential roofing business, which is responsible for about half of its overall revenue.

THE BIG PICTURE: In the nine months through June, Beacon Roofing Supply Inc.'s revenue has grown 8 percent to $1.56 billion. Revenue in the April-June quarter grew 12 percent to $627.2 million.

THE ANALYSIS: The analyst cut his price target to $39 per share from $42 and lowered his rating on the shares to "Neutral" from "Outperform."

He now expects Beacon to report net income of 57 cents per share in the fiscal fourth quarter, down from his previous estimate of 68 cents per share. FactSet says analysts expect net income of 63 cents per share for the period that ends this month.

He also reduced his fiscal 2014 estimate to $1.70 per share from $1.93. Wall Street predicts $1.92 for the year ending in September 2014.

SHARE ACTION: Beacon Roofing Supply shares lost $2.62, or 7.1 percent, to close at $34.25. The stock has risen nearly 3 percent in 2013.