Icy Hot Marketer Goes Cold for Analyst

2009-07-08 | 08:20

Chattem gets a downgrade on lower sales projections.

A Jefferies & Co. analyst downgraded shares of toiletries and dietary supplements maker Chattem Inc. Wednesday, citing concerns over a slowdown in sales.

Jefferies analyst Douglas M. Lane cut his rating on the stock to "Hold" from "Buy" and reaffirmed a price target of $72. In a note to clients, he wrote sales seem to have fallen in June.

"This compels us to reduce estimates, and with the stock within 8 percent of our target, to move to the sidelines pending reacceleration of point-of-sales," he wrote in a note to investors.

Lane's price target on Chattem shares is $72. The stock finished Tuesday's trading at $65.90.

Lane also cut his fiscal 2009 earnings-per-share outlook to $4.50 from $4.60.

Chattanooga, Tenn.-based Chattem's products include medicated skin care products such as Gold Bond, Cortizone-10, and Balmex, along with topical pain products Icy Hot and Aspercreme. It also makes the medicated dandruff shampoo Selsun Blue and dietary supplements.