Merrill Lynch downgraded Business Objects (BOBJ ) to neutral from buy.
Analyst Edward Maguire says he downgraded given recent stock price appreciation, a lack of near-term catalysts, and the heightened competitive landscape. Atlhough the Enterprise 6 product cycle is on track, the competition is tough. Additionally, he's concerned that the appreciation of the euro will weigh on fixed costs.
Maguire lowered the 2003 earnings per share estimate to 75 cents, on $503.8 million revenue, from 79 cents, on $507.6 million in revenue. He also reduced the 2004 estimate to 91 cents, on $547.6 million in revenue, from 95 cents, on $554.1 million in revenue. This reflects a modest assumptions for Europe sales and lower margins.