Warburg Cuts Rating on Korn/Ferry
Warburg lowered its investment rating on executive search firm Korn/Ferry (KFY ) to hold from strong buy, saying that current revenue estimates are now too aggressive. The shares closed off 4-13/16 at 18-1/4.
Analyst Kelly Flynn notes previous estimates reflected the likely impact of an economic slowdown, recent layoffs and the M&A environment in financial services. But recent conversations with a number of private firms have led her to believe revenue estimates for core business and Futurestep are now too aggressive.
Therefore, to reflect caution, she cut her third quarter earnings per share estimate to $0.15 from $0.27, and her fiscal year 2001 EPS $0.82 from $1.05. She also cut her fiscal year 2002 estimate to $1.51 from $1.78.
Flynn doesn't see upward share price movement until she gets a more accurate gauge on the viability of new estimates.