JP Morgan downgraded Amdocs (DOX) to market perform from long term buy.
Analyst Sterling Auty says the demand outlook continues to be bleak. He says the capital expenditures environment is tougher than ever, with new deals harder to come by; customers want smaller deals, larger discounts, and creative pricing. He believes this downward pressure on margins adds incremental earnings per share risk. Auty says the backlog is performing a disappearing act.
He cut his $0.33 fiscal 2002 (Sept.) EPS estimate to $0.17, and cut the $0.43 fiscal 2003 estimate to $0.25. He does not think the stock will appreciate in the near term as telecom spending malaise continues.