Jefferies Downgrades Eagle Materials to Underperform (EXP)

Jefferies is out with its report today on Eagle Materials EXP, downgrading EXP from Hold to Underperform. In a report sent to clients, Jefferies notes, "Our unchanged price target of $24/share is 15% below the current share price. We are therefore downgrading our rating on the shares to Underperform from Hold. We are lowering our FY2011 EPS estimate from $0.62 to $0.53 and our FY 2012 estimate from $0.61 to $0.50 due to our slightly more cautious assumptions on both cement and wallboard pricing. Our 12-month price target ($24) is calculated by multiplying our estimate of Eagle's mid-cycle EBITDA of $195m by our estimate of its future average EV/EBITDA ratio of 7.0 times." Shares of EXP are trading lower during pre-market at $28.92, down 0.28% from Monday's close.