) shares fell after Bear Stearns downgrades to underperform from peer perform based on valuation.
Analyst Andrew Neff says PLMO is trading at a multiple comparable to Apple (AAPL
) and Hewlett-Packard (HPQ
), which does not seem warranted since these two have stronger balance sheets, are profitable, and have attractive non-hardware businesses. He says there could be some upside from Treo 600 and new products during the holiday season, but the current price level is difficult to justify given the number of challenges PLMO faces, such as intensifying competition from Microsoft (MSFT
) operating system-based device vendors (Dell, Hewlett-Packard, and others).
Neff sees 7 cents in second-quarter EPS, and a loss of 80 cents per share in fiscal year 2004 (May), and a loss of 40 cents per share in fiscal 2005.