JP Morgan Cuts RSA Security to 'Market Perform'
JP Morgan downgraded RSA Security (RSAS ) to market perform from buy.
Analyst Sterling Auty says during a conference call, the electronic data security company announced it is being investigated by the SEC for disclosure of accounting issues during the March quarter, as well as some trading issues; this is pressuring shares. The downgrade is based on the SEC investigation, just another question mark hanging over the stock. This makes it difficult for new investors to come into name until there's more clarity. The quarter met the bottom line through cost controls, but EPS quality was rough as revenue was bit light vs. Auty's expectation. He lowered his $0.29 2002 EPS estimate to $0.25.