Wed, Apr 15, 2009
Stock Dips As Market Responds To Lack Of Hard Information
The price of Textron stock,
inflated dramatically last week by rumors of
an impending buyout by middle eastern investors, has lost some air
this week as analysts reevaluated the stock.
Dow Jones reports Macquarie Capital analyst Robert Stallard
lowered his investment rating to neutral from outperform, saying
the risk/reward equation looks less favorable now. Of the potential
to realize gains ahead of a potential sale, he added, "...we
believe this still makes for a volatile ride that many may choose
Cowen & Company analyst Cai Von Rumohr said the drop in
Textron's share price this week has to do with investors' inability
to really know what's happening behind the scenes.
"The company is not commenting and there really isn't any way to
check out this rumor," he said, adding the focus is returning to
Textron's upcoming quarterly results.
Those results are expected to be released on April 29; they're
also expected to be disappointing. Dow Jones reports analysts
polled by Thomson Reuters expect earnings of 2 cents per share on
revenue of $2.79 billion.
Even if the rumor is confirmed, the sale could be complicated
from a regulatory standpoint. Textron has a mix of consumer
products, civil aviation, and defense operations... areas the
federal government would likely express reservations about, if the
company were sold to a middle eastern concern.
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