CHARLOTTE, N.C.—Shares of Horizon Lines Inc. tumbled Friday after the shipping and logistics company said its first-quarter earnings sank and it cut its outlook for the year.
Stephens Inc. Kevin Sterling analyst cut the stock to "Equal Weight" from "Overweight." He halved his 12-month price target to $15 from $30.
"We continue to see management raise guidance, lower guidance, raise guidance, and lower guidance, and in our opinion, this calls into question management's visibility into its business," he said. "We are tired of the tennis match with guidance and are stepping to the sidelines and have a hard time recommending new money into a company with such poor visibility."
Sterling said the company's increasing debt is also a concern, as Horizon's vessels age and it seeks to buy new ones.
The analyst said he may revisit his rating after the company can begin to produce more consistent earnings growth and provide more accurate views for the future.
"Until the company can deliver consistently, we think the stock is dead money," Sterling said.
Shares plunged $3.38, or 23.1 percent, to close at $11.25 -- its lowest point since weeks after its public offering in September 2005.
