ABN has lifted a hold recommendation to sell on the stock while its 12-month share price target has been revised down from $1.84 to $1.25 in its latest research.
Scott last week announced a $836,000 loss for the six months to February 28, compared to a $1.2 million profit for the same period last year.
ABN has forecast a full-year after-tax loss of $1.3 million, compared to a $2.4 million profit the year before, but sees some recovery in 2009 with a forecast profit of $200,000 and $1.8 million in 2010.
Announcing the half-year loss, Scott chairman Stuart McLauchlan said , as raised at the company's annual meeting in December, the high value of the New Zealand dollar, high domestic interest rates and the global liquidity crisis were hurting the export-oriented manufacturer.
ABN broker Peter McIntyre said yesterday Scott revenues for the first half were down 42% to $8.3 million and ABN had forecast an after-tax profit of around $900,000, noting the Scott guidance in December was given at "somewhat'' below the previous corresponding period's net profit after tax of $1.2 million.
"Many of the country's traditional United States' appliance-manufacturer customers have deferred plant installations while they reassess their market demand,'' he said.
It has been reported that in the face of the global credit crunch, prompted by the earlier subprime crisis, US companies will be revising their expansion and capital expenditure as the likelihood of recession begins to bite.
Although Scott was finding the present trading environment difficult, inquiries and quotations were at record levels and its balance sheet remained strong and debt-free, Mr McIntyre said.
