) to hold from buy.
Analyst Jeffrey Macy says his downgrade reflects anemic organic growth, recent run-up in stock. He notes 10% of expected bookings for 2003 derives from the company's IKOS acquisition, and 10% from organic growth. Shares are near his $12 target.
Macy says on a conference call, the company said it doesn't expect a tremendous increase to customers' R&D budgets, and reiterated fourth quarter guidance. Since it is late in the quarter, Macy says he has confidence in its 26 cents fourth quarter earnings per share estimate. He lowered his 52 cents 2003 earnings per share estimate to 50 cents, while raising his $640 million revenue estimate to $660 million, which reflects his cautious view, and assumed no organic growth.
He says he will looks for signs of an economic recovery.