Jarden Corporation (JAH) Downgraded To Hold

Jefferies & Company analysts Douglas M. Lane and Per E. Ostlund lowered their rating for shares of Jarden Corporation (NYSE: JAH) to Hold, from the previous rating of Buy. They also lowered the price target to $52.50, from the previous price target of $55.00.

The analysts' new price target was based on their revised earnings estimates for Jarden Corporation's fiscal year 2011. They lowered the 2011 earnings per share estimate to $3.10, from the previous $3.40 EPS estimate.

The analysts listed consumer spending, competitive pressures, raw material costs, retailer inventory destocking, and foreign currency fluctuations as investment risks currently associated with Jarden Corporation.

The Jefferies & Company analysts wrote, "for JAH, we are reducing our gross margin assumption for 2010E from 29.0% to 28.0% and for 2011E from 29.5% to 28.2% as we now are below mgt's stated goal of increasing gross margins by at least 50 basis points annually. Besides raw input cost pressures, currency from Europe and shipping from China pose additional cost pressures the company is poised to endure for the next several quarters. Our 2010E estimate is going from $2.70 to $2.65 and 2011E from $3.40 to $3.10. About 2/3 of the expected 17% EPS growth in 2011E is due to the full year accretion from the recently closed Mapa Spontex acquisition, with the remainder from low- to mid-single digit organic EPS growth."