Pacific Growth reiterated it overweight rating on Business Objects (BOBJ )
Analyst Pat Mason says he thinks the software maker will meet his second-quarter estimate of $122.5 million in revenue and 17 cents earnings per share. He thinks the company also will affirm the 2003 guidance of 10% revenue growth, and more than 10% earnings growth. Mason says if Business Objects continues to execute, the stock could trade at 2.7 times the 2004 enterprise-value-to sales ratio, or 33 times his 85 cents 2004 earnings per share est., which equates to a $28 stock. He say Business Objects traded down in the wake of lower-than-expected guidance from peer Cognos.
Mason notes, however, that Business Objects doesn't have the same foreign-exchange troubles as Cognos, given Business Objects' exposure in Europe. (Cognos has high exposure to Canada, where currency has unexpectedly appreciated).