GFI Group Shares Fall On Analyst Downgrade

NEW YORK (AP) — Shares of GFI Group Inc. slid Monday after an analyst downgraded the stock to "neutral" from "buy," saying its shares are overpriced.

Shares of the inter-dealer broker, which specializes in derivatives and related products, fell 42 cents, or 5.3 percent to $7.46 in afternoon trading. They've traded between $2.09 and $7.93 cents in the past year.

Pali Capital Inc. analyst Christopher Allen said the stock price is up 90 percent since it reported its first quarter earnings, while the S&P 500 is up 20 percent in that time frame. GFI is trading at more than 10 times Allen's 2010 earnings per share estimate of 75 cents per share and 29 percent above the consensus estimate of analysts surveyed by Thomson Reuters.

"Given the current uncertainty on the regulatory front and the current environment, we do not see a catalyst to drive upside for our 2010 EPS estimates at the moment," Allen wrote in an investor note. "We would be more interested in the stock below $7 or if we were more confident financial services reform would occur by the end of 2009. So for now, we prefer to be on the sidelines."