UPDATE: Bank of America Downgrades KEMET; Lowers PO

According to a research report published this morning, Bank of America has downgraded KEMET

from Buy to Underperform, and lowered PO from $12 to $8. In the report, Bank of America commented, "We are downgrading shares of Kemet to Underperform from Buy given our view that the road to improvement in earnings will be a long one. We view primary headwinds as (1) slow recovery in Film and Electrolytic (F&E) margins from an unexpected breakeven gross margin in the latest reported quarter, (2) execution risk associated with multiple significant undertakings (restructuring, integration of Niotan, pending stake in NEC-Tokin), (3) increased interest expense from recently issued debt to fund the M&A, and (4) an uncertain macroeconomic environment." KEMET closed yesterday at $7.52.