Chattem Hits Low After Analyst Warns On Sales

NEW YORK (AP) — Shares of health care products and consumer goods maker Chattem Inc. fell to their lowest price in nearly two years Wednesday after a Goldman Sachs analyst cautioned that Chattem's revenue forecast is probably not realistic.

Michael Kelter began covering the stock with a "Neutral" rating and a share price target of $67, which implies the stock could rise about 12 percent over the next year.

But the analyst was doubtful that Chattem could achieve its goal of organic sales growth by a percentage in the mid-to-high single digits because of the weak economy.

"We see the potential for a sales miss, but believe earnings-per-share downside should be limited as a result of a flexible advertising and promotions model," he wrote.

Chattem's products include Gold Bond itch powder, Icy Hot pain wraps, Selsun Blue dandruff shampoo, toiletries and dietary supplements.

In afternoon trading, Chattem stock slid $4.27, or 7.2 percent, to $55.46. Earlier the shares traded as low as $53.99, a level last reached in March 2007.