5/15 BEAS ( $38 gap $42)Stock Up 11 Percent After Earns Release
NEW YORK (Reuters) - Shares of BEA Systems Inc. (NasdaqNM:BEAS - news) surged 11 percent on Wednesday, the day after the application server maker released quarterly results and raised its earnings forecast for its current fiscal year.
Shares of the San Jose, Calif., maker of software that developers use as a foundation on which to build their programs were up $3.74 at $37.78 in morning trade, the low end of a 52-week range of $20.19 to $89.50. The stock was among the most active and leading net gainers on the Nasdaq Stock Market.
``We believe BEA has weathered through the worst of the economic downturn in fine fashion and are now upgrading from buy to a strong buy,'' Thomas Weisel Partners analyst Tim Klasell wrote in a research note.
After Tuesday's market close, BEA reported fiscal first-quarter earnings that beat consensus expectations by a penny and raised its guidance for the year ending in January.
The company said it expects its revenue mix to continue to shift toward high-margin licensing while easing up on lower-margin services. Although BEA said revenue growth for the year probably will be at the low end of its prior guidance, it raised its earnings per share outlook because of the higher profit margin it expects.
Several analysts, such as Goldman Sachs' Anne Meisner and Lehman Brothers Neil Herman, maintained their bullish ratings on the stock.
However, Banc of America Securities' Greg Vogel lowered his price target to $45 from $60 because of the stock's high valuation.
While BEA and other market leaders, such as Siebel Systems Inc. (NasdaqNM:SEBL - news) and Veritas Software Corp. (NasdaqNM:VRTS - news), ``will continue to garner premium valuations,'' he wrote, ``we are somewhat cautious at these levels.''
Vogel maintained a buy rating on the stock. ``We believe investors should be opportunistic with entry points,'' he said.
Prudential's John McPeake, one of the first analysts to raise concerns about BEA's long-term outlook, kept his hold rating and $41 price target on the stock.
BEA had begun to feel the economic impact of the slowdown in information technology spending, he said, and competition from International Business Machines Corp. (NYSE:IBM - news) may have contributed to deals becoming more difficult to close. |
