UPDATE: Morgan Keegan Downgrades FLIR Systems to Market Perform

Morgan Keegan is out with its report today on FLIR Systems

, downgrading FLIR from Outperform to Market Perform. In a note to clients, Morgan Keegan writes, "We have lowered our estimates, but still see risk to financial results over at least the coming year given the worsening weakness in the defense market and integration expenses. We still believe that FLIR has long term potential, but see significant uncertainty surrounding the company over the next couple of years. Given this risk, we now believe that shares of FLIR are fairly valued at current levels (we note that we expect the stock to take a significant hit this morning on this result and have taken this into account) and are downgrading our rating from Outperform to Market Perform and lowering our price target to $29 from $38." At the time of posting, shares of FLIR were trading at $28.24, down 12.05% from Thursday's close.