USB Piper downgraded digital-media software maker Avid Technology (AVID) to market perform from outperform.
Analyst Gene Munster says the stock is priced for outperformance, and has surpassed his $55 target. He says channel checks, which include 17 Avid resellers, prove that resellers expect business to be in line for the third quarter and fourth quarter, vs. his belief that the Street is looking for upside. While only one reseller out of 17 felt the environment has worsened over the past three months, 53% believe there's no change in the environment.
Munster says resellers indicated that third-quarter sales of Avid's products increased 2.1% from the second quarter, vs. the Street's expectations for a 3.1% gain. He sees 34 cents third-quarter earnings per share on $118 million revenue, $1.27 earnings per share in 2003, and $1.85 earnings per share in 2004.