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What: Shares of equipment manufacturer Meritor Inc. (NYSE:MTOR) dropped as much as 11.6% in afternoon trading on Wall Street after being downgraded by analysts. Shares were down a more modest 8.9% as of 2:50 p.m. EDT.

So what: Analysts at Piper Jaffray downgraded Meritor's stock from neutral to an underweight rating. Shares were given a $6.00 price target, down from a previous $6.50. The target is now less than 10% below where shares are trading. 

Now what: History shows that Wall Street analysts aren't very good at predicting stock movements and actually have little incentive to do so. So I would take a single downgrade with a grain of salt.

If you look at management's guidance for 2016, they're expecting earnings per share of $1.55 to $1.65, which puts the company's current P/E ratio below 4; that's an incredible value. And with $90 million in free cash flow expected for the year, I think there's still value in shares, even in a rough operating environment.