Massey Energy Co shares fell more than 7 percent Friday after the coal miner warned of a third-quarter operating loss and lower production following a blast that killed 29 men at one of its mines.

Macquarie downgraded Massey to a "neutral" investment rating and cut its stock price target to $38 from $65, citing continued production shortfalls and cost escalation. Howard Weil cut Massey's stock price target to $40 from $50.

Massey said Thursday that production has fallen since the April 5 blast at the Upper Big Branch mine in West Virginia and said it expects to report a third-quarter operating loss.

It said full-year 2010 operating results could be at the low end of its estimate, but the 2011 target is unchanged.

Massey stock was down 7.7 percent at $29.84 in morning trading on the New York Stock Exchange.