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RESEARCH ALERT-Banc of America cuts four auto suppliers

CHICAGO, Nov 20 (Reuters) - Banc of America Securities on Wednesday said it downgraded its investment rating on four auto suppliers, citing potential for weaker auto sales going forward.

Analyst Ronald Tadross lowered American Axle & Manufacturing Holdings Inc. , BorgWarner Inc. , Johnson Controls Inc. and Lear Corp. to "market performer" from "buy."

Shares of American Axle fell 84 cents, or 3.4 percent, to $23.91 in midday trading on the New York Stock Exchange. BorgWarner shares fell $1.74, or 3.8 percent, to $43.86, while Johnson Controls was off $1.25, or 1.5 percent, to $80.87 and Lear dropped $2.08, or 5.8 percent, to $34.00.

Tadross said two trends should pressure U.S. light vehicle sales beginning in 2003: a relatively young median age of vehicles on the road, and fewer autos due to come off lease agreements.

Taken together, these factors could reduce the auto sales outlook to 14 million to 16 million annual units from the recent pace of 16 million to 17 million units, the analyst said.

"Valuation multiples are not fully discounting the earnings and balance sheet risk of a prolonged auto sales downturn," Tadross said in a research report.

"In addition, the poor fundamental state of GM and Ford will only further damage the picture," he wrote.