UPDATE: Piper Jaffray Downgrades Maxwell Technologies to Neutral Following Resignation of Auditor
Piper Jaffray downgraded Maxwell Technologies (NASDAQ: MXWL) from Overweight to Neutral and lowered the price target from $11.50 to $6.50.
Piper Jaffray analyst Alexander Potter wrote, "We are downgrading MXWL to Neutral following the sudden resignation of the company's auditor, McGladrey LLP. We defended MXWL earlier this month when the company first announced an error in its historical filings. At the time, the issue appeared relatively benign: the errors apparently dealt with inappropriate revenue recognition, but only resulted in ~$12m of necessary adjustments. However, we struggle to see how/why the company's auditor would resign over this issue. We believe investors are likely to suspect more grievous problems, and thus we are cutting our target multiple to 5.5x EV/EBITDA, which is well below the peer group average of 9x-10x."
Maxwell Technologies closed at $7.44 on Tuesday.
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