NEW YORK (TheStreet) -- Shares of Smart & Final Stores (SFS) - Get Smart & Final Stores, Inc. Report closed down on heavy trading volume on Tuesday after Morgan Stanley reduced its rating on the stock to "underweight" from "equal weight," the Fly reports.

The downgrade comes after the Commerce, CA-based food retailer posted lower-than-anticipated results for the 2016 second quarter and cut its outlook last month.

Smart & Final posted adjusted earnings of 20 cents per share, missing analysts' estimates by a penny. Revenue for the quarter was $1.04 billion, while Wall Street was expecting $1.05 billion.

The firm expects pressure to remain through the second half of the year, sees further risk to consensus estimates and growing risks related to the company's exposure to California, the Fly noted.

About 842,237 of the company's shares changed hands today vs. its average 30-day volume of 394,221 shares per day.

TheStreet Recommends

Separately, TheStreet Ratings Team has a "Sell" rating with a score of D on the stock.

The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, deteriorating net income, generally high debt management risk, disappointing return on equity and poor profit margins.

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: SFS

Image placeholder title