) to sell from neutral, and cuts his target to $25.
Analyst Hari Srinivasan says a smaller upgrade pool lowers growth potential from adoption of 2D to 3D, and vertical products. He notes his recent survey of 30 resellers indicated while most resellers are on track to meet plan, business momentum may be slowing.
He says his thesis of slower sales growth could prove incorrect if industrial sector capital spending was more robust than expected. On a 2005 cash adjusted p-e basis, the company's share valuation is ahead of fundamentals.
Srinivasan cuts his $31 target to $25, which is 25 times 93 cents cash-adjusted fiscal 2006 (ending January) earnings per share estimate, plus $1.75 cash per share.