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Analyst Actions: Riverbed, Demandtec


From Standard & Poor's Equity ResearchDEUTSCHE BANK DOWNGRADES RIVERBED TECHNOLOGY TO HOLD FROM BUY

Deutsche Bank analyst Cobb Sadler says Riverbed Technology (RVBD) pre-announced first quarter revenue of $72-$73 million, below his $80.5 million estimate.; non-GAAP EPS guided to $0.08-$0.10, below his $0.14. He notes management attributed the slowdown mainly to macro-economic trends causing lengthening sales cycles.

Sadler says he's moving to sidelines due to weakness in macro-economic conditions and lack of visibility, despite management optimism on the second quarter. He awaits tangible evidence of acceleration in the company's business before becoming more constructive.

He cuts first quarter revenue estimate to $73 million and EPS to $0.09; $375 million 2008 revenue to $335.2 million and $0.75 EPS to $0.60; he cuts $500 million 2009 revenue to $434.3 million, $1.15 EPS to $0.95. He slashes $60 price target to $12, which is 20 times his 2008 EPS estimate.

WILLIAM BLAIR CUTS DEMANDTEC TO MARKET PERFORM FROM OUTPERFORM

William Blair analyst Laura Lederman says although she still likes Demandtec's (DMAN) market, competitive position and products, she's concerned about how it will fare going forward since over 75% of its business is derived from the currently weak U.S. retail sector.

Lederman notes this quarter, the company already saw at least one deal slip (possibly more); further, despite saying sales cycles seem to be lengthening, the company still projects 8-12 new retail clients in fiscal year 2009 (February), which she feels might prove to be aggressive. She also says the company provided less info than she would have liked about the current tone of business (pipeline, bookings) and assumptions within its fiscal year 2009 (February) guidance.

She cuts $0.28 fiscal year 2009 non-GAAP EPS estimate to $0.11.


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