Salomon Smith Barney downgraded its investment rating on Sun Microsystems Inc. (SUNW) to neutral from buy.
Analyst John Jones said he's concerned future revenues and earnings per share growth will come at the expense of drawing down backlog, rather than from new orders. And given prior concerns about pockets of softness in its business, today's call has further heightened valuation risk, the analyst added.
Jones cuts his fiscal 2001 earnings per share estimate to $0.69 from $0.71, and his fiscal year 2002 EPS estimate to $0.85 from $0.90. He also cut his price target on the stock from $30 to $55. Shares of Sun Microsystems were trading up 7/16 at 30-7/8.