PerkinElmer downgraded over dim growth prospects

A Barclay's Capital analyst downgraded shares of health and industrial sciences company PerkinElmer Inc. Tuesday, citing potential growth issues the company faces when the economy recovers.

The stock dipped 55 cents, or 3.2 percent, to $16.92 in morning trading. Shares have traded between $10.88 and $29.95 over the last 52 weeks.

Analyst C. Anthony Butler downgraded the stock to "Underweight" from "Equal Weight," citing the company's higher exposure to industrial markets than its peers. The Waltham, Mass.-based company provides tools and equipment for scientific laboratories and drug developers. It also provides environmental health services and clinical research services.

"We believe the company has more industrial exposure, lacks differentiated technologies, and has significantly lower operating margins, meaning its growth prospects are less than peers and fewer dollars will likely flow to the bottom line once growth does resume," he said, in a note to investors.

Butler reaffirmed a $15 price target, implying he expects shares to decline 14 percent from Monday's closing price.

PerkinElmer's first-quarter profit was nearly cut in half by restructuring and other charges while revenue slipped. The bulk of its revenue during that quarter came from the environmental health unit, with sales falling 9 percent to $254.3 million. Sales from the human health unit fell 2 percent to $177.3 million.

The company's peers include Waters Corp., Thermo Fisher Scientific Inc. and Agilent Technologies Inc. Each company benefits from upsurges in research and development in the medical field, particularly with pharmaceutical and biotechnology companies. The economic downturn and cost-cutting at both large and small drug developers has been cutting into their revenue.

The analyst also noted PerkinElmer stock is up 26 percent in the year to date, outpacing its peers and getting "ahead of itself."

Elsewhere, analysts maintain a mixed view on PerkinElmer, with UBS and Robert W. Baird analysts maintaining "Buy" and "Outperform" ratings, respectively. Leerink Swann's analyst has a "Market Perform" rating on the company and Thomas Weisel Partners' analyst has a "Market Weight" rating on the stock.