In Thursday’s top analyst upgrades and downgrades from 247 Wall St., one significant downgrade that stood out the most was in shares of Smith & Wesson Holding Corp. (NASDAQ: SWHC). KeyBanc Capital Markets was already at a somewhat cautious Hold rating after the gunsmith’s stock had risen so much, but now the rating was taken down to Underperform.

On top of the downgrade came a $10 price target. That implied a downside risk of about 18% from Wednesday’s closing price of $12.18. The news sent shares down 8.2% to $11.18 shortly before the closing bell. Trading volume also was nearly triple the average daily volume of 2.1 million shares.

It turns out that this downgrade was viewed as a “gun downgrade,” even if the Thursday market weakness may have contributed to the selling. Shares of Sturm, Ruger & Co. Inc. (NYSE: RGR) were down 4% to $52.80 shortly before Thursday’s closing bell. The gunmaker has a market cap of $1.02 billion and a 52-week trading range of $40.00 to $60.11.

Even Alliant Techsystems Inc. (NYSE: ATK) was down, with its shares down about 1.6% to $98.42 shortly before the close. This is the largest bullet manufacturer in America, and its shares are now down about 3% from the recent multiyear high.

Earlier in the week came reports that the FBI gun background checks did not grow in July versus June. You have heard the term peak oil before, and the market is taking this as “peak gun demand” perhaps having passed by. KeyBanc thinks that gun demand has either peaked or plateaued.

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