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Philips Lighting has shone brightly since its IPO on May 27 but analysts at Jefferies have warned it looks set to fade.

Unconditional dealings in the Philips' spinoff began yesterday in Amsterdam after the IPO of about 25% of the group and the stock by Tuesday's close had risen to euro 22.30 from an IPO price of euro 20.00.

But, initiating coverage, Jefferies slapped an underperform tag on the stock and set a price target of just euro 17.00.

"The dominant profit producer (Lamps) is in structural decline, LED lamps are inherently more competitive and Home (which is loss-making) is too small to matter. The key to the investment case is therefore Professional, which is 37% of sales but much less profitable than leading peers. We are sceptical about the turnaround prospects," Jefferies said.

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The analysts noted that the company's professional unit - its second largest - commands lower margins than its peers, or 5% compared with about 14% for Acuity (AYI) - Get Acuity Brands, Inc. Report .

Their target valuation for Philips Lighting is euro 4 billion ($4.5 billion), including debt, which equates to a price tag euro 2.5 billion for the stock, or euro 17.00 per share.

That's almost 24% below Tuesday's close.