Shares of Clarcor Inc fell as much as 6 percent on Thursday, a day after the filtration products maker reported lower-than-expected third-quarter results and cut its full-year earnings forecast. We believe (the) shares will remain range bound pending the company's ability to meet and exceed expectations and are maintaining our 'hold' rating, said analyst Jeffrey Hammond of KeyBanc Capital Markets.

Clarcor, which also makes consumer and industrial packaging products, said it expects commercial rail industry to remain soft for the rest of the year and into 2010.

Hammond said although demand is stabilizing, near-term recovery remains elusive.

Clarcor's primary end market -- domestic freight activity -- will be among the first to improve in a broader macro recovery, the analyst said.

The company's valuation premium relative to its industrial peers represents fairly healthy expectations for a rebound in activity, Hammond wrote in a note to clients.

Shares of the Franklin, Tennessee-based company were down 75 cents at $32.23 in morning trade on the New York Stock Exchange. They fell to $31.00 in early trade. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Gopakumar Warrier)