ATS Automation Tooling Systems downgraded to "underperform"

11/14/07 - Credit Suisse

NEW YORK, November 14 (newratings.com) - Analysts at Credit Suisse downgrade ATS Automation Tooling Systems (ATA) from "neutral" to "underperform," while reducing their estimates for the company. The target price has been reduced from C$8.00 to C$4.50.

In a research note published this morning, the analysts mention that the company has posted disappointing F2Q07 results, with the EPS significantly short of the estimates and the consensus. Automation Tooling Systems’ margins in the Photowatt segment are unlikely to improve significantly during the foreseeable future, since lower grade MgSi would continue to account for 60% of the product mix going forward, the analysts add. The EPS estimates for FY08 and FY09 have been reduced from -$0.06 to -$0.53 and from $0.19 to -$0.05, respectively.