) to underweight from equal-weight.
Analyst Adam Waldo says his downgrade was based on valuation. He notes the stock is up more than 30% to $22 since the company's slightly better-than-expected second quarter release on Dec. 18. He notes this surpasses his $21 one-year target, or 30 times his 67 cents calendar 2003 earnings per share estimate, and 3.3% 2003 forecasted free cash flow yield.
Waldo thinks the current valuation offers very limited margin of safety for investors, as it discounts rapid acceleration in bull market finance, accounting consulting, and staffing demand throughout 2003 and 2004, which clearly is not visible to him.