Wachovia cut the estimates and price target on Rational Software (RATL).
Analyst Jason Maynard tells says following the company's first quarter guidance, he cut the $0.48 fiscal 2003 (March) earnings per share on $736 million revenue estimate to $0.15 EPS on $643 million in revenue. He also shaved the $17 12-month to 18-month target to $8.
Maynard notes the company tied its first quarter guidance to a challenging IT spending environment, and a surplus of user licenses among the company's key customers. Maynard thinks the spending environment will remain challenging. However, he also believes Rational's current stock price represents an attractive entry point for long-term-oriented investors. On that basis, he maintains his buy rating.