NEW YORK (AP) -- Shares of American Axle & Manufacturing Holdings Inc. tumbled Thursday on worries that the effects of the continued decline in pickup and sport utility demand on the company may be worse than previously thought.
In heavy afternoon trading, American Axle shares shed 55 cents, or 4.7 percent, to $11.23, after dropping as low as $10.87 earlier in the day, marking the auto supplier's lowest share price since the weeks after the Sept. 11 terrorist attacks.
KeyBanc Capital Markets analyst Brett D. Hoselton said that based on new data from CSM Worldwide, an auto industry consulting company, he now expects the decline in North American production and shift away from light trucks to continue into 2009 before hitting bottom.
The analyst said he previously expected the decline to stop before the end of 2008 and be followed by flat production in 2009 and 2010.
Hoselton slashed his price target for American Axle by $6 to $18 and boosted his 2008 per-share loss projection for the company to 88 cents from 81 cents.
He also cut his 2009 per earnings prediction by 84 cents to $2.16 per share and 2010 earnings estimate by 55 cents to $3.15 per share.
Analysts polled by Thomson Financial expect a 2008 loss of 84 cents per share, a 2009 profit of $2.41 per share and a 2010 profit of $3.08 per share.
But despite the lower expectations, Hoselton said American Axle shares remain attractive.
"At the current price, we reiterate our 'Buy' rating on Axle as the stock is currently trading at a significant discount to our price target," Hoselton wrote in a note to investors.
"And we continue to believe that the labor agreement Axle has signed has afforded the company flexibility in its operations and the ability to win new business in this difficult environment."
Hoselton's price target implies upside of 52.7 percent over the stock's finishing price Wednesday of $11.79. The shares are down nearly 37 percent since the start of the year.
