NEW YORK (AP) — Shares of Taser International retreated from five-year highs Wednesday after a JPMorgan analyst downgraded the stock.
THE SPARK: With Taser shares trading around his price target of $12, analyst Paul Coster cut his rating to "Neutral" from "Overweight." Coster said he has a positive view on Taser's business but noted that the stock has been climbing.
"The stock has increased 36 percent in the past two weeks, we believe primarily fueled by reports that a U.S. District Court judge ordered New York City police to pilot body-worn police cameras, a potentially significant opportunity for Taser's video solution," he said.
He added that new police department guidelines in Ontario may result in expanded use of Tasers.
THE BIG PICTURE: Earlier this Judge Shira Scheindlin ruled that the New York City Police Department singled out large numbers of blacks and Hispanics under its stop-and-frisk policy. She appointed an independent monitor to oversee major changes, including testing body cameras on some officers.
Taser International Inc. said its revenue grew 14 percent to $32.2 million in the second quarter on greater sales of its newest stun gun. Revenue from its video segment grew to $1.9 million, and investors see video equipment as a potential boost to its business.
On Aug. 13 Taser said all patrol officers in the Surprise, Ariz., Police Department will be issued its Axon Flex cameras, which capture video and audio during traffic stops or at crime scenes. The company also said that the Fort Worth, Texas, police department recently deployed 145 cameras and the Dallas/Fort Worth International Airport deployed 100 cameras.
SHARE ACTION: Taser shares lost 58 cents, or 4.9 percent, to $11.27 in afternoon trading. The stock has risen 36.2 percent from their Aug. 13 closing price, and it reached a five-year high of $12.17 on Tuesday.