Allegheny Technologies Falls After Downgrade

NEW YORK (AP) — Allegheny Technologies Inc. fell Friday after an analyst downgraded the shares on expectations that the specialty metals producer's fourth quarter will disappoint investors.

JP Morgan analyst Michael F. Gambardella downgraded shares of the Pittsburgh-based company to "Underweight" from "Neutral."

"We think improving fundamentals in ATI's stainless business will be mostly offset (in the fourth quarter) by continued weakness in its aerospace-related business," he said.

Gambardella cited declining aircraft build rates, reduced aftermarket business because of destocking and flat global air traffic as reasons for his caution.

His expectation that the fourth quarter will disappoint Wall Street led him to trim his estimate for earnings per share in the quarter to 5 cents from 10 cents. The analyst also cut his 2010 estimate to $1.50 from $1.70.

Analysts polled by Thomson Reuters expect, on average, fourth-quarter earnings per share of 14 cents and 2010 earnings per share of $1.49.

Gambardella also said the stock "seems to have gotten ahead of itself," rising 17.1 percent versus an average 8.3 percent jump for its specialty metals peers.

The share price decline followed a gain Thursday after UBS analyst Timna Tanners upgraded the stock to "Buy" from "Neutral" and raised her price target to $42 from $31.

In midday trading, shares fell $2.26, or 5.8 percent, to $36.71.