From Standard & Poor's Equity ResearchPiper Jaffray downgraded Digitas (DTAS
) to market perform from outperform, noting that the company lowered its 2006 guidance due to client challenges.
Analyst Aaron Kessler says management announced during a conference call that it had lost 3 non-top-10 clients (Ameriprise Financial, (AMP
), Best Buy (BBY
), FedEx (FDX
)). It now expects GM and Delta Air Lines to decrease their spend by 14% in 2006 vs. previous guidance of flat spend. He believes the loss of the 3 clients was a combination of those companies consolidating their agencies, plus Digitas's inadequate staffing, and thelack of focus on these clients. Digitas noted it will make management changes and improve customer relations. It cuts its $16 stock price target to $9.50.