Polypore falls as analyst downgrades shares

HARTFORD, Conn. (AP) — Shares of Polypore International Inc. fell Tuesday as an analyst cut his rating, saying the manufacturer of membranes used in batteries for cars and consumer products reached his price target.

Analyst Richard C. Eastman of Robert W. Baird&Co. Inc. downgraded shares of the Charlotte, N.C., business to "Neutral" from "Outperform," saying shares had reached his $14 price target.

"We see risk/reward as balanced," Eastman said in a client note.

Eastman said Poloypore's position as a key supplier of lithium battery separators and other filtration devices remains attractive. But the near-term risk of reduced lead acid sales, the expiration of a contract with a large customer and the outcome of an FTC challenge remain "an overhang and, we believe, limits short-term upside from the current price," Eastman said.

The Federal Trade Commission last year challenged Polypore's acquisition of rival battery separator manufacturer Microporous Products LP, calling the deal anticompetitive.

In announcing the purchase for about $76 million in cash, assumption of debt and borrowing under Polypore's credit facility, Polypore said it broadened its participation in the industrial battery market, added to its membrane technology portfolio and products, improved customer service and added cost-effective production capacity.

The FTC case is pending.

Shares fell 87 cents, or 6.2 percent, to $13.15 in morning trading.