Markets & Finance

Pacific Growth Keeps 'Overweight' on Business Objects

Pacific Growth reiterated it overweight rating on Business Objects (BOBJ)

Analyst Pat Mason says he thinks the software maker will meet his second-quarter estimate of $122.5 million in revenue and 17 cents earnings per share. He thinks the company also will affirm the 2003 guidance of 10% revenue growth, and more than 10% earnings growth. Mason says if Business Objects continues to execute, the stock could trade at 2.7 times the 2004 enterprise-value-to sales ratio, or 33 times his 85 cents 2004 earnings per share est., which equates to a $28 stock. He say Business Objects traded down in the wake of lower-than-expected guidance from peer Cognos.

Mason notes, however, that Business Objects doesn't have the same foreign-exchange troubles as Cognos, given Business Objects' exposure in Europe. (Cognos has high exposure to Canada, where currency has unexpectedly appreciated).

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