) to market perform from long-term buy, citing valuation.
Analyst Sterling Auty says he likes Mcafee.com, but notes the stock has hit his $24 target on Windows XP euphoria. Operationally, he believes the company has never been stronger, but at 106 times estimated fiscal year 2002 EPS, 42 times estimated forward free cash flow and 11.9 times estimated 2002 revenues. Shares look fully valued as the market awaits next catalyst.
Auty maintains his 2001 EPS of $0.11 and 2002 EPS of $0.21. He has a $24 2002 price target and says, if operations remain this strong, he would look to upgrade as valuation comes more in line with the company's outlook.