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To: Larry S. who wrote (15937)	8/21/1998 12:42:00 PM
From: Johnathan C. Doe	Respond to of 53068

NEW YORK (CBS.MW) -- As Peerless Systems Corp. shares shed two-thirds of their value Friday afternoon, probably the loudest screamers were Piper Jaffray clients. You see, Peerless was supposed to be the hot software play for August, in the investment bank's estimation. Just three weeks ago, analysts Hany Nada and Safa Rashtchy reiterated their "strong buy" rating on the stock (PRLS) -- and said they saw it hitting 28 within a year. Not exactly. The stock shed two-thirds of its value by Friday afternoon, plummeting 14 1/16 to 6 9/16. Interestingly, volume hit 9 million shares by midday; Peerless has just 10 million shares outstanding. Analyst Rashtchy said in an interview Friday that he now rates the stock a "buy" and sees shares hitting 15 within a year. The stock had traded in the low 20s for much of the summer. Rashtchy said he was "surprised" by the sharpness of the Peerless decline. "The fundamentals of the company haven't really changed," he said. "The company has a very strong pipeline, there is no change in the demand for [Peerless products] and they have a bunch of new initiatives that are on track." Still, he trimmed his earnings outlook for Peerless to 40 cents per share from 58 cents a share for fiscal 1999, which ends in January. And he cut his earnings outlook for the company's next fiscal year by one-fourth; he now sees the company making 52 cents per share in fiscal 2000. Peerless, which makes software for copiers and printers, warned after the market closed Thursday that it sees "dampened" results for at least the next year. The El Segundo, Calif.-based company blamed a slowdown in service revenue and missed shipments. Prudential Securities cut its rating on Peerless to "hold" from "accumulate," while Adams Harkness & Hill lowered its rating to "market perform" from "attractive."