Lehman Brothers downgraded BEA Systems (BEAS) Advent Software (ADVS), Mercury Interactive (MERQ) and Veritas Software (VRTS) to buy. Lehman also downgraded Micromuse (MUSE) to market perform.
Analyst Neil Herman says after attending a conference last week, the universal feedback he received is that the overall environment for software purchasing remains challenging with no near-term signs of significant improvement in the overall environment.
Furthermore, he's very concerned that the September quarter could be seasonally weaker than usual. Although he believes these stocks are likely to be dead money at best for the next two quarters, Herman says he does believe that for longer-term oriented investors, the valuations are quite appealing.