Ahead Of The Bell: American Woodmark Downgraded

HARTFORD, Conn. (AP) — A weak recovery in housing markets will continue to hurt American Woodmark Corp., an analyst said Wednesday as he downgraded the kitchen cabinet maker.

R.W. Baird analyst Peter Lisnic lowered his rating on the Winchester, Va.-based company to "Underperform" from "Neutral" and cut his price target to $19 from $24.

"While recent data suggests housing markets could be nearing a bottom, recovery is likely to be long and subdued in our opinion," he wrote in a client note.

American Woodmark is "executing well with earnings power likely structurally higher, but an improved demand environment and higher potential returns already appear amply discounted in the stock," he added.

The company posted a fiscal first-quarter loss Tuesday, citing double-digit sales declines for remodeling and new construction. For the quarter ended July 31, it posted an adjusted loss of $4.8 million, or 34 cents per share.

Sales tumbled 28 percent to $100.8 million from $139.2 million.

Lisnic cut his fiscal 2010 per-share estimate to a loss of 90 cents from a profit of 20 cents. He reduced his 2011 estimate to a loss of 10 cents per share from a profit of 60 cents per share.