Nidec, the Japanese manufacturer of precision motors and industrial equipment, saw its shares fall 9.3%, approaching the 11-month low set earlier this month.

This decline followed UBS's decision to downgrade the stock from "Buy" to "Neutral" and reduce its price target from 2,800 yen to 2,400 yen, citing a more challenging market environment.

UBS also lowered its forecasts for the company's operating profit for both the current and next fiscal years, which are now 16% and 22% below market consensus, respectively.

UBS analysts Shingo Hirata and Kohei Takahashi stated in an October 8 report that this downgrade reflects a more cautious view on the pace of recovery due to factors such as overcapacity in home appliances, intensified competition, and the heavy fixed cost burden of industrial motors.

They added that while Nidec has been emphasizing its efforts to improve corporate governance, significant impairment charges, management changes, and three consecutive disclaimer-of-opinion reports from its auditor mean it may take time for the company to regain the capital market's confidence.

Since announcing a massive impairment charge at the end of September, Nidec's stock price has continued to plummet. This impairment has nearly erased all the profits the company earned over the past decade.

The UBS analysts noted that key issues to watch include whether Nidec can obtain an audit opinion by the end of October, submit an internal control report, file its semi-annual report in November, and announce its medium-term management plan in December.