ERNEST SCHEYDERNEW YORK (AP) ¿ Shares of Ferro Corp. spiked Wednesday after an analyst said the specialty materials and chemicals maker likely will be able to improve earnings after posting a first-quarter loss. The stock rose 80 cents, or 18.1 percent, to $5.17 in morning trading. Shares of Ferro, which makes nonstick coatings for cookware, as well as solar cell parts and metallic coatings, have traded between 81 cents and $24.13 in the past 52 weeks. KeyBanc Capital Markets analyst Michael J. Sison upgraded the company to "Buy" from "Hold" and set an $8 price target, implying he expects shares to jump 83 percent from Tuesday's $4.37 close. The upgrade came after Ferro posted a first-quarter loss and said sales dropped 39 percent. But Sison said those results likely were the bottom, and performance should improve. "We believe Ferro will emerge from this downturn a much leaner and better organized specialty chemical company with significant earnings potential down the road," he said in a note to clients.
Earlier this week Gabelli & Co. analyst Rob Felice took a more cautious approach to the Cleveland-based company's shares. "On top of efforts to stabilize/improve earnings, we believe Ferro's focus over the next several quarters must be free cash flow generation, debt reduction and/or strategic alterations to its capital structure," he said. Felice cut his rating to "Hold" from "Buy" and lowered his outlook for 2009 to a loss of 50 cents per share from a profit of 10 cents. Analysts polled by Thomson Reuters expect, on average, a 2009 loss of 21 cents per share. A Ferro representative was not immediately available for comment.