Ahead of the Bell: Valmont Industries downgraded

An analyst downgraded Valmont Industries Inc. Tuesday following a rally in shares of the diversified manufacturer.

However, Sterne Agee analyst Michael Coleman said his outlook for the Omaha, Neb.-based company is unchanged because it stands to benefit from improved business in several of its segments.

Coleman lowered his rating to "Neutral" from "Buy," noting that Valmont shares have nearly doubled in value since February, compared with a 33 percent increase in the Standard & Poor's 500 index over the same period.

He maintained a share price target of $87.

Valmont's irrigation business should recover this fall and into next year, Coleman said. He believes the segment's profit will be $45 million next year, up from an estimated $39 million in 2009.

In addition, Valmont has a "multiyear growth opportunity" in its utility transmission structures business, but significant outperformance recently will make comparisons difficult in the first half of 2010, Coleman said.

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He estimated income for the business next year at about $112 million, down from a projected $136 million in 2009.

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Coleman predicted Valmont's engineered support structures will earn $73 million in 2010, up from $55 million estimated for this year, primarily due to improvement in margins.

Shares of Valmont finished Monday's trading at $86.75.