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Latest downgrade may be an entry point on CEDC
3/29/2011 9:27:00 AM
By: Emerging Money
Vodka importer Central European Distribution has spent the last month reeling from a bad fourth quarter report, but the worst may be over. CEDC ( quote ) has literally been cut in half since February 28, right before it reported a miss on its recent quarter and warned that the current outlook is probably going to stay weak as well. But since then, the brokers and even the credit agencies have piled on -- Nomura and Credit Suisse going early to "neutral" and "underperform," respectively -- and the stock has kept drifting. Now JP Morgan is joining the bear party -- a month into the game -- with a downgrade all the way from overweight to underweight. It turns out that CEDC's previous earnings guidance may "look aggressive." As a result, JPM now thinks the stock will trade at around $10 a year from now, versus its previous target of $25.50. Leaving aside the question of where they have been at JPM, the heads up call is welcome. At this point, CEDC has been so beaten down that this may actually be the point where value-oriented players can start nibbling at the stock.