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Technology Stocks : BEA Systems (BEAS) - Undiscovered Growth Stock -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (2418)	6/14/2005 12:43:52 PM
From: Jim Oravetz	Read Replies (2) \| Respond to of 2477

BEA Systems Faces Growing Competition BEA Systems Inc. (BEAS: Nasdaq) By Bear Stearns ($8.68, June 13, 2005) WE ARE REDUCING OUR ESTIMATES and downgrading our rating on BEA Systems to Underperform from Peer Perform based on growing competitive concerns, the belief that there is a low probability of the company being acquired in the near-term and our skepticism about the company's new product initiatives. In our view, IBM continues to represent BEA's greatest competitor, but we believe that competitive pressures from both Oracle and JBoss are mounting. As these pressures increase, we do not believe that BEA's new product initiatives will be effective in replacing lost revenues or momentum. Fundamentally, we view the company's position as having a very low defensibility from increasing pricing pressure and from market share losses in the application server market. While BEA has over time attempted to expand beyond its core product franchises, we view these attempts as having demonstrated little appreciable success. The company's large installed base, significant cash flows and over $2 per share in net cash will continue to help to support the shares, but we believe that there is appreciable downside risk from current levels, particularly as we believe cash flows will be hurt by competitive pressures. We believe that BEA Systems' shares are fairly valued at close to $7 per share, representing about a 20% downside from current levels. -- John DiFucci