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J.P. Morgan analyst Paul Coster this morning cut his rating on iRobot to Neutral from Overweight, while keeping his $37 target price. The stock closed Thursday at $34.96.
Coster writes in a research note that the downgrade is basically a valuation call.
The stock is up 25% in the last five days; Coster says the shares now price in upside from margin expansion and international growth and offsetting risks from Defense Department budget cuts and macro uncertainty. "We maintain our positive long-term outlook for the company; however, we believe that investors can be patient and look for more
attractive entry points to add to positions over the near-term," he writes.
IRBT on Thursday rose $1.72, or 5.2%, to $34.96.
