UPDATE: Imperial Capital Downgrades Ducommun to In-Line, Lowers PT Following Weak 1Q13 Results

In a report published Tuesday, Imperial Capital analyst Ken Herbert downgraded the rating on Ducommun

from Outperform to In-Line, and lowered the price target from $28.00 to $25.00. In the report, Herbert noted, “We are downgrading our rating on DCO to In-Line from Outperform, and we are lowering our one-year price target to $25 from $28. While much of our long-term positive thesis remains, we believe the non-A&D markets (natural resources, industrial, and medical) will be a headwind at least until 3Q-4Q13, further limiting top-line growth and putting additional pressure on the DLT margins. We recommend investors look to take profits, as the stock has been one of the best performing A&D stocks so far in 2013, and look for a more attractive entry point. DCO's 1Q13 results were weaker than expected, with non-A&D markets the primary headwind (down over 30%). Adjusted EPS was just $0.16 (excluding a $0.19 one-time tax benefit) as compared to our estimate of $0.34. Margins in both segments were up over 1Q12, but the improvement was slightly less than we had been expecting. Sales growth in the quarter was a negative 5%. While the company does not issue financial guidance, we are lowering our 2013 and 2014 EPS estimates to $1.83 and $2.18, respectively. Also, we are introducing our 2015 estimates.” Ducommun closed on Monday at $26.71.