Salomon Smith Barney cut Macromedia (MACR ) to outperform. Analyst Jonathan Rosenzweig says on Feb. 21, he upgraded Macromedia from neutral to buy, with a target of $17. He says shares are near a 52-week low, there are signs of stabilization in its core business, a major product cycle is imminent, inventories are at heir lowest levels in four years, and there's substantial operating leverage into any top line recovery. For these reasons, Rosenzweig argued in February that the risk to reward ratio was compelling.
Fundamentally, he says his thesis remains intact. While he still thinks the current upgrade cycle will serve as a catalyst for Macromedia's top line, he say the share price and risk to reward ratio is tempered by a recent move in valuation. While Rosenzweig cut his rating to outperform, he raised his target to $24.