JP Morgan downgraded Verint Systems (VRNT ) to neutral from overweight, explaining that there are few obvious near-term catalysts to trigger the stock price's improvement.
Analyst Paul Coster still likes the company as long-term holding, but says he's generally disappointed by the pace at which larger, nationwide, homeland security programs are progressing. He attributes this slippage to budget deficits, complexity, and contention for resources. He notes that transportation security deployment is a positive stand-out at the city-wide level, but he believes this is priced into the stock already. He also believes Verint is appropriately valued at 29.2 times his $1.31 fiscal year 2007 (ending January) earnings per sahre estimates, a 25.3% premium to the mean of his coverage universe.