) to neutral from buy, citing news that Amnon Landan, Douglas Smith, and Susan Skaer resigned as the company's chief executive officer, chief financial officer, and General Counsel, respectively, following an internal investigation of stock options grants.
Analyst Kirk Materne says there appears to be no change in the scope of the internal probe into the company. Materne believes the management reorganization could open the door for strategic alternatives, including mergers and acquisitions. He sees risks related to the unproven management changes, another potential delay in the company's filings past Nov. 30, and the potential concerns from customers. He cut his target to $35 from $42, or 22 times his 2006 earnings per share estimate of $1.58. He also sees $1.42 2005 earnings per share.