New York, NY, Apr. 19--Citing valuation concerns, Banc of America cut its rating of Federated Department Stores to "neutral" from "buy."
However, the research house stressed that it believes the company's fundamentals are strong and that the retailer could produce earnings surprises later in 2004.
Nonetheless, Banc of America said that such pleasant events already are reflected in the stock price. "Our concerns are in keeping with our thesis that the group is in the latter stages of a cyclical retail play with the specter of higher rates having the potential to compress multiples," the research firm said. Banc of America has a $56 price target for the share, which in late afternoon was traded at $52.22, down $1.08 on the session.
