Waters shares fall on downgrade

Shares of Waters Corp. fell in trading Thursday after a J.P. Morgan analyst downgraded his rating on the company's stock, saying he sees limited room for profit growth at the analytical instrument maker.

THE SPARK: Analyst Tycho Peterson downgraded his rating on the company to "Neutral" from "Overweight."

THE BIG PICTURE: Waters, based in Milford, Mass., makes products used in drug discovery and development.

THE ANALYSIS: The analyst said the company has limited room for profit growth, largely because its margin structure is at nearly peak levels. The company also faces increasing pressure from competitors, potentially softer demand from India and he expects its sales growth will be more modest in 2013.

Additionally, its price-to-earnings ratio is above that of its peers.

Peterson has a $90 price target on the company's shares.

SHARE ACTION: Shares fell 3 percent to $86 by late afternoon. Its shares remain in the middle of their 52-week trading range of $72.98 and $94.47.