What happened

Shares of Chicago Bridge & Iron Company (CBI) closed down 10.9% on Wednesday after the engineering company saw its stock cut to "hold" by analysts at Jefferies.

So what

A one-notch downgrade from buy to hold doesn't sound so bad, but here's the thing: Back when Jefferies was still recommending that investors buy Chicago Bridge stock (i.e., yesterday), the analyst was predicting CB&I shares would more than triple to $35 a share. That pie-in-the-sky possibility is now off the table.

Instead, according to Jefferies, Chicago Bridge stock is probably worth $12 at best. Granted, that's still 20% more than what the stock costs today. But for any investors who had been hoping to see CB&I turn into a three-bagger, news of this price target cut had to come as the biggest disappointment.

Unfinished bridge stops mid-stream

Image source: Getty Images.

Now what

And even $12 could be a stretch in a worst-case scenario. Among other risks, Jefferies highlights the risk that cost overruns at Chicago Bridge's two liquefied natural gas projects could ding earnings this year, next year, and even the year after that.

Given that Chicago Bridge is already losing money and selling for a negative P/E ratio, that it's issued guidance essentially guaranteeing that it will lose money this year, and that it just suspended its dividend to boot, that seems to be a risk that investors are unwilling to take.