Analyst slashes price target on AbitibiBowater

In a client note, Lehman Brothers analyst Peter Ruschmeier cut his price target on the Montreal-based company to $9 from $13--a 30.8 percent reduction. His new price target implies upside of less than 1 percent over its ending price Thursday of $8.93.

"We remain concerned about the company's exposure to declining newsprint demand, chronically high costs, a strong Canadian dollar, and significant financial leverage," the analyst wrote.

Ruschmeier, who has an "Equal Weight" ranking on the stock, hiked the amount he estimates AbitibiBowater will lose in the second quarter to $2.42 per share from $2.31 per share. Analysts surveyed by Thomson Financial expect, on average, a loss of $2.43 per share.

He also now anticipates a wider full-year loss of $11, compared with his prior view of a per-share loss of $9.75, due to "weaker lumber and newsprint demand coupled with higher costs for wastepaper, energy, chemicals, and transportation."

Analysts expect an annual loss of $8.97 per share. The company is slated to report its results on Aug. 7.

Shares fell 79 cents, or 8.9 percent, to $8.14 in afternoon trading. In the last 52 weeks, the stock has traded between $4.70 and $37.45, and is off by nearly 57 percent since the start of the year.