Merrill Downgrades Business Objects
Merrill Lynch downgrades Business Objects (BOBJ )to near-term neutral from accumulate. Analysts Scott Phillips and Ed Maguire downgrade the stock based on valuation as it currently is exceeding their $30 price target by 18%. With the recent run-up, the analysts believe current valuation no longer offers sufficient near-term upside to sustain an accumulate rating. At 43 times the analysts' $0.82 2002 EPS estimate, the stock is fully valued. The analysts think the run-up is liquidity-driven as opposed to a sustainable fundamental rally. The analysts maintain long-term buy rating based on the company's leadership role in the sector and execution prowess.
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