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JP Morgan Cuts Advent Software Rating


JP Morgan lowered its investment rating on Advent Software (ADVS) to long-term buy from buy. On June 10, the company announced plans to acquire Techfi Corp.

Analyst Adam Holt says Advent also announced a new strategy to offer its core Advent Office Suite on a term license basis vs. the perpetual licenses it has traditionally offered. He notes that Advent expects near-term confusion in the channel related to this change in pricing, as well as the Techfi acquisition. Also, its move to term licenses results in lower near-term revenue, according to the analyst. Following the change in its strategy, and the acquisition, Holt cut his $1.39 2002 EPS estimate to $0.90 and his $1.81 forecast for 2003 to $1.43. Given the magnitude of his EPS estimate cuts, and confusion over Advent's strategy, Holt thinks the stock will be range-bound; he cut his price target to $43.


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