Macromedia Cut to 'Sell'

Also: Analysts' opinions on Amerada Hess, Ford Motor, JLG and Cirrus Logic

Macromedia (MACR ): Downgrading to 1 STAR (sell) from 2 STARS (avoid)

Analyst: Scott Kessler

The downgrade comes because of recent price appreciation in the shares. Macromedia has been strong in the past 10 days, due in great part to a PC Data report indicating product demand has likely bottomed. The company was also upgraded by two sell-side firms over the past week. Recent price gains more than reflect stable (yet still weak) demand and anticipated new software introductions seen over the next four months. Despite Macromedia's recent assurances, S&P questions if it can post pro forma EPS in the June quarter. S&P sees the company as overvalued at 123 times its fiscal 2003 (Mar.) EPS estimate of $0.15 and 34% above its intrinsic value estimate using discounted cash flow analysis.

Amerada Hess (AHC ): Still 3 STARS (hold)

Analyst: Tina Vital

Shares of energy company Amerada Hess were higher on Friday after the company said its selling its U.K. retail and trading unit to TXU Corp. for about $152M, and after news of another oil discovery off Equatorial Guinea. S&P sees further consolidation within both upstream and downstream industry sectors, as major oils seek to gain balance and growth. S&P, however, didn't speculate on the likelihood of any particular merger. With Amerada Hess trading in line with peers and the balance sheet weak on Triton acquisition, S&P recommends holding for now.

Ford Motor (F ): Still 3 STARS (hold)

Analyst: Efraim Levy

The automaker's February sales fell 12%. Car volume shrank 21%, and trucks slid a more moderate 6% in a seasonally slow month. The numbers include a 29% decline in less profitable fleet sales. Jaguar and Land Rover again were exceptions to sales declines as they benefited from new products. Explorer sales also rose. S&P is disappointed by a return to 0% financing by Ford and GM. But S&P is looking for a year-to-year production volume increase in Q2 for Ford. S&P is forecasting lower industry light vehicle sales volume at 15.9 million in 2002.

JLG Industries (JLG ): Raise to 5 STARS (buy)# from 4 STARS (accumulate)

Analyst: James Sanders

Sanders says he sees JLG expanding its market share in fiscal year 2002 (Sep.) and fiscal year 2003, especially in Europe where aerial work platforms and telehandler markets are larger and less mature. He also sees further U.S. sales growth as several major customers, most notably United Rentals (URI ) will likely increase their equipment spending during 2003.

He is lowering his fiscal year 2002 estimate $0.10 to $0.68 as some revenue gets pushed to fiscal year 2003. He sees fiscal year 2003 earnings per share of $1.41. He recommends it as a buy.

Cirrus Logic (CRUS ): Still 1 STAR (sell): Analyst: Megan Graham-Hackett

The company firms that March quarter loss is at "more favorable end" of guidance of $0.11-$0.15. Revenues are to be at high end of range of $81 million to $83 million, but the will still be down nearly 60% year over year. Graham-Hackett says she is not surprised as Cirrus also noted it plans to take a $73 million reserve against disputed receivables from Western Digital & Fujitsu related to the exit of its magnetic storage business, resulting in GAAP charge in the March quarter of same amount. The reserve is due to fact that receivables have been in dispute since Fall of 2001. Graham-Hackett says the stock remains a "sell."

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