Shares Of URS Fall On Analyst Downgrade

HARTFORD, Conn. (AP) — Shares of URS Corp. fell Monday as an analyst downgraded shares of the engineering and construction company on delays in federal stimulus spending, though money from Washington for other projects could still be a boon.

Analyst Will Gabrielski of Broadpoint AmTech downgraded URS to "Neutral" from "Sell."

In a note to clients, Gabrielski said the impact from federal stimulus spending is later than what had been expected, hurting companies such as URS that are involved in design work.

"As a result of softer federal spending, we are moving to the sidelines given our belief that investors will not look through short-term down earnings," he said.

URS ultimately can reach his price target of $60, but the timing has shifted "by months, not years," and more time is needed for evidence of 2010 funding for a positive impact on earnings, Gabrielski said.

Stimulus spending, the federal government's 2010 budget and strong bond issues will benefit leading design and construction management firms such as URS, he said. However, his downgrade could be wrong in the near-term if stimulus funding accelerates sooner than he expects or if URS wins a contract for nuclear power plant construction, Gabrielski said.

URS remains "extremely well positioned" to benefit from stimulus spending and the 2010 federal budget, limiting any downside from current levels, he said.

Shares fell $1.91, or 4.3 percent, to $42.03 in morning trading.