Zacks Investment Research downgraded shares of RBC Bearings Inc. (ROLL) from NEUTRAL to UNDERPERFORM on March 12, 2015, with a target price of $56.00.
RBC Bearings reported moderate results in third-quarter fiscal 2015. Top-line figures marginally missed the Zacks Consensus Estimate in the quarter. However both adjusted earnings and revenues exceeded their respective year ago tallies. The company's aerospace and defense trade experienced weakness due to lower distribution activities. Furthermore, the company's business is highly exposed to threats from external market headwinds and peer group rivalry. Also, facing concentrated demand for products, the company's sales can substantially fluctuate in case of a change in the preference pattern of certain potential buyers. Based on these factors, we prefer to downgrade our recommendation on the stock to Underperform from Neutral. To offset the negative impact of the above issues, the company needs to continue its growth drive in the industrial products' business.
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