Zacks Investment Research downgraded shares of The St. Joe Company (JOE) from OUTPERFORM to UNDERPERFORM on May 06, 2013, with a target price of $18.00.
We are downgrading our long-term recommendation for St. Joe to Underperform from Outperform due to the current headwinds for its residential and commercial segment. The company, which is scheduled to report its first-quarter 2013 earnings on May 8, reported sluggish fourth-quarter 2012 results with earnings per share, missing the Zacks Consensus Estimate as a dip in real estate revenues acted as a headwind. Moreover, persistent reduction in revenues from rural land sales segment added to the woes. Additionally, St. Joe's business is primarily concentrated in Florida, which was one of the hardest hit states in the recession and this adversely affected its bottom line in the recent past. Given the current stressed economic environment in its key markets, we believe the company lacks significant growth catalyst in the near term and hence we remain bearish on the stock.
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