UBS cuts FreightCar America to 'Sell' on price

Analyst Jason Feldman, who previously had a "Neutral" rating on the stock, said shares were now too expensive following a 30 percent jump since early August. He suggested that while investors seemed optimistic about potential benefits from growing U.S. coal exports, possible new orders and lower raw material costs, he thinks it is too early to invest in the sector.

He noted the industry has a great deal of excess capacity and suggests demand should remain "sluggish at best for some time."

Feldman also said that increased competition for coal car orders might cut into FreightCar America's share of the market. He said that rival Trinity Industries Inc. is currently pursuing the market "aggressively."

The analyst further expected that new products coming on the market could squeeze margins and hurt pricing.

Feldman maintained his $29 price target and earnings estimates for FreightCar.

Shares fell 82 cents, or 2.2 percent, to end at $35.95.