Mixed Reaction to PeopleSoft Report Includes Morgan Stanley Downgrade
1/31/01 12:05 PM ET
It's hard to please people, as PeopleSoft (PSFT:Nasdaq - news) discovered Wednesday morning. The business-management software firm was downgraded to neutral from outperform by Morgan Stanley Dean Witter, despite posting positive fourth-quarter results and 2001 guidance Tuesday.
Reaction from other analysts was mixed, but investors pushed the company's shares down $6.13, or 12.53%, to $42.75 in morning trading on the Nasdaq.
Merrill Lynch analyst Craig Wood also said the company's guidance for 2001 was "positive" but "not significantly ahead of what people were expecting," according to Reuters.
But UBS Warburg called the company's fourth quarter "impressive" and maintained its hold rating. Still, it warned that 2001 would be "more challenging" amid increasing competition.
US Bancorp also maintained its buy rating on PeopleSoft, which surpassed the brokerage's revenue and earnings expectations for the fourth quarter, while Lehman Brothers reiterated its strong buy rating and raised its price target to $60 from $55.
J.P Morgan analyst James Pickrel, who kept his buy rating on the company, raised his 2001 revenue estimates to $2.1 billion from $1.9 billion, and earnings-per-share estimates to 62 cents from 60 cents, saying he remains "enthusiastic" about his outlook for Peoplesoft. Pickrel also said Wednesday he believes the company "is ready to compete on equal footing" with rivals like Oracle (ORCL:Nasdaq - news) and SAP (SAP:NYSE ADR - news). |
