PSFT 4/26 ( strng.. $28 up $$36 !) jumps on Strong Results, Upgrades
PALO ALTO, Calif. (Reuters) - Shares of e-business software maker PeopleSoft Inc. (NasdaqNM:PSFT - news) jumped more than 22 percent on Thursday following strong first-quarter results and upgrades from financial analysts.
PeopleSoft shares were among the day's biggest gainers, rising $6.69 to close at $36.62 on the Nasdaq exchange. PeopleSoft shares, which have traded between $12 and $53.875 this year, have outperformed Standard & Poor's computer software index by about 220 percent since the end of 1999.
SAP AG (SAPG.DE), which recently posted strong results, also showed gains while the software index and rival enterprise software sellers like Oracle Corp. (NasdaqNM:ORCL - news) and Siebel Systems Inc. (NasdaqNM:SEBL - news) ended the day lower.
Credit Suisse First Boston raised its rating on the Pleasanton, California-based software maker to buy from hold after the company on Wednesday posted earnings that beat Wall Street estimates and management reiterated its second-quarter and 2001 forecasts, despite tough economic conditions that have caused Corporate America to cut technology spending.
Morgan Stanley boosted its rating to strong buy from neutral and Goldman Sachs added PeopleSoft to its recommended for purchase list.
``In the current economic environment PeopleSoft has regained its former status as a preferred vendor with a broad Internet-based product portfolio, broad geographic region and vertical market coverage, a recognized brand name, and strong financial position,'' Goldman said a note on Thursday.
Goldman said that enterprise application companies are performing the best in the sector and PeopleSoft is performing the best within that group. It also noted that the company does not appear to be shedding resources or costs like most other vendors.
The investment firm raised its 2001 revenue estimates to $2.05 billion from nearly $2 billion and its earnings estimates to 58 cents a share from 55 cents a share.
Lehman Brothers analyst Neil Herman reiterated his strong buy rating on the stock and said the firm is ``stubbornly maintaining our above company guidance earnings estimates.''
Herman expects the company to earn 65 cents a share during 2001, significantly higher than the company's guidance for earnings in the range of 55 cents to 60 cents.
In his investor note, Herman said the company is making market-share gains and that the new version of PeopleSoft's customer relationship management (CRM) suite -- which is set for release on June 4 -- should give it upside opportunity in the back half of 2001 and 2002.
FAC Equities analyst Robert Kugel reiterated his neutral rating on the stock after adjusting his 2001 and 2002 estimates higher.
``Although there is upside to our forecast, we do not expect any blow-out surprises and think the company's solid recovery is already reflected in the current valuation,'' Kugel said in a note.
Goldman, on the other hand, said that while PeopleSoft shares are not cheap, they are trading at a discount to other software vendors. |
