Analyst cuts rating on Asset Acceptance Capital

Shares of Asset Acceptance Capital Corp. tumbled Tuesday, after a Jefferies & Co. analyst cut his rating on the company because of expected difficult collections environment during the remainder of the year.

Debt collector Asset Acceptance Capital purchases and collects charged-off consumer credit loans. Charged-off loans are loans banks write off as not being repaid.

Shares of Asset Acceptance Capital fell 99 cents, or 8.9 percent, to $10.20 Tuesday. Shares have traded between $7.31 and $17.89 during the past year.

Jefferies analyst Richard Shane cut his rating on the company to "Underperform" from "Hold."

Shane said despite improved pricing on defaulted portfolios, Asset Acceptance Capital faces an increasingly difficult environment to try and collect unpaid loans because of weakening in the broader economy.

Rising energy and food prices coupled with declining real estate prices will likely put pressure on consumers' ability to repay loans, Shane wrote in a research note. Asset Acceptance is also overvalued compared with its peers, Shane added.

Asset Acceptance did not immediately return calls seeking comment.

Shane's price target for Asset Acceptance Capital is $8.