UPDATE: Bank of America Downgrades Rush Enterprises on Full Valuation

In a report published Tuesday, Bank of America analyst Andrew Obin downgraded the rating on Rush Enterprises (NASDAQ: RUSHA) from Buy to Underperform, but raised the price target from $33.00 to $34.00.

In the report, Bank of America noted, “RUSHA has crossed our prior PO of $33, and we downgrade the stock from Buy to Underperform. Based on our above consensus EPS, RUSHA is trading at 15.4x our '15 EPS, above its historical long-term average P/E and a premium to the auto and construction dealer comp groups (see p.3). In our view, RUSHA's valuation already reflects the improving N.A. truck cycle. RUSHA stands out as the best performer in our coverage YTD at up 16% (v. XLI up 1%).

"While we view RUSHA as an excellent company, with a unique business model focused on services and solid exposure to oil & gas markets, our downgrade distinguishes between the company and the stock as we now see more risk than upside to the stock at current trading levels.”

Rush Enterprises closed on Monday at $34.52.