UPDATE: Bank of America Downgrades Dole Foods to Underperform on Banana Headwinds

Bank of America reduced its rating on Dole Foods

and reduced its price objective from $15 to $9. Bank of America noted, "Our Underperform rating is based on: 1) a weaker than expected 2013 outlook for the remaining business; 2) higher than expected debt levels post deal; and 3) closing of the divestiture taking longer than expected. Dole provided an update on January 2, 2013 regarding its 2013 pro forma outlook. Management expects EBITDA for 2013 to be in a range of $150-170mn, which includes $20mn of cost savings, compared to our previous estimate of $210mn. The primary difference is that the remaining North American banana margins are expected to deteriorate due to aggressive pricing by competitors looking to gain market share. We expect the shares to underperform in the near term given the pressure in the NA banana market and limited visibility." Dole Foods closed at $9.92 on Thursday.