Just like Clockwork...More Downgrades...
RESEARCH ALERT-Lehman downgrades B2B software makers
Friday March 9, 12:02 pm Eastern Time
<<NEW YORK, March 9 (Reuters) - Lehman Brothers on Friday cut its ratings on several leaders in the business-to-business software market, citing the weakening U.S. economy and heated competition.
Analyst Patrick Walravens downgraded Ariba Inc. (NasdaqNM:ARBA - news) and Commerce One Inc. (NasdaqNM:CMRC - news) to market perform from buy and lowered estimates for the quarter and year. He cut PurchasePro.com Inc. (NasdaqNM:PPRO - news) to buy from strong buy and lowered estimates and target price to $30 a share. Finally, he cut VerticalNet Inc. (NasdaqNM:VERT - news) to market perform from buy.
Based on recent talks with heads of companies responsible for buying technology, Walravens said customers are increasingly concerned about the U.S. economy and are delaying expensive purchases. They also are more scrupulously evaluating claims by B2B software makers that the money their products save customers outweighs the cost of the software.
Finally, Walravens said that i2 Technologies Inc.'s (NasdaqNM:ITWO - news) recent purchase of Rightworks will take market share away from Commerce One and affect Ariba even more severely. I2 is the No. 1 seller of ``e-procurement'' software that enables companies to manage and automate their purchasing and inventory. The acquisition of Rightworks allows i2 to offer software that to set up B2B online exchanges and buy finished goods and raw materials over the Internet -- Ariba's domain.
The downgrades follow earlier earnings reductions by Goldman Sachs and Bank of America analysts, who also cited the slowdown in the U.S. economy.
In Friday morning trading, shares of Ariba were down $1-5/8, or 12 percent, at $12, while Commerce One dropped $2, or 14.7 percent, to $11-5/8 and VerticalNet fell 11/32, or 11.5 percent, to $2-21/32. All three stocks hit 52-week lows earlier in the session. PurchasePro was down $1-5/16, or 11 percent, at $10-5/8, near a 52-week low of $9-3/16.>>
***It takes some real talent to downgrade these former high flyers when they are already at 52-week lows (some have lost 90+% of their value).
Best Regards,
Scott |
