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SkyWest shares fall after Raymond James downgrade

NEW YORK (AP) -- Shares of SkyWest Inc. tumbled Thursday after a Raymond James analyst downgraded the stock, saying that it recently missed out on a pair of key business opportunities.

THE SPARK: Analyst James Parker cut his rating to "Outperform" from "Strong Buy," saying that his previous rating was based on expectations that SkyWest was best positioned to secure most of the aircraft in four potential new pieces of contractual flying for regional airlines with major carriers, totaling 370 larger regional jets.

But Parker said that SkyWest will instead get some incremental business, as it has missed out on two of the four significant pieces with Delta awarding 40 regional jets to Pinnacle and American awarding 53 regional jets to Republic.

THE BIG PICTURE: SkyWest is a St. George, Utah-based carrier that operates flights for United, Delta, US Airways, American Airlines and others.

Its shares tumbled during the first seven months of 2012, losing about half their value and hitting a low of $6.31 in early August. The shares have rallied since then.

THE ANALYSIS: Parker said he still thinks there are two near-term potential pieces of contractual flying for regional airlines, with United and U.S. Airways, totaling up to 265 larger regional jets. In addition, American may award additional regional jet flying, which could go to SkyWest, he said.

"Because of its strong balance sheet, we believe SkyWest is well-positioned to secure some of the aircraft in the additional contracts, none of which is reflected in our current estimates," Parker wrote in a note to investors.

THE SHARES: Down 97 cents, or 7 percent, to $12.85 in afternoon trading, after peaking at $13.89 earlier in the session.