Nov 12 (Reuters) - Shares of Linamar Corp (LNR.TO) fell as much as 14 percent on Friday, a day after the Canadian maker of auto parts and other precision machined components posted a quarterly profit that trailed estimates and announced the resignation of its chief financial officer. CIBC Capital Markets cut its rating on the stock to “sector underperformer” from “sector performer,” saying there is more upside to other auto or industrial related companies that it covers.
Some of the other companies that are in the brokerage’s coverage universe include Martinrea (MRE.TO), which reported a higher third-quarter profit earlier in the week. [ID:nN08122433]
RBC Capital Markets cut its price target on Linamar shares to C$27 from C$29, saying higher launch costs are expected to continue until the second quarter of 2011.
The company’s July-September earnings were 32 Canadian cents a share, while analysts on an average expected 34 Canadian cents a share, according to Thomson Reuters I/B/E/S. [ID:nSGE6AA0QU]
“However, we continue to believe that the longer-term earnings drivers are intact, and would take advantage of weakness to accumulate positions,” RBC Capital Markets analyst Steve Arthur, who maintained his “outperform” rating on the stock, said.
The company’s shares, which have gained about 61 percent year-to-date, were down 12 percent at C$19.66 in early-morning trade on the Toronto Stock Exchange. They touched a near three-week low of C$19.35 earlier in the session. (Reporting by Isheeta Sanghi in Bangalore; Editing by Maju Samuel)