Merrill Upgrades Cognos to 'Buy'
Merrill upgraded Cognos (COGN ) to buy from neutral.
Analyst Ed Maguire says the new ReportNet offering kicks off a new product cycle that could spark sales acceleration. He says ReportNet fills out one of the company's weaker product areas, and targets an enterprise-reporting opportunity previously addressed by rivals Crystal Decisions, Actuate, and Brio Software.
Maguire believes Cognos could seize market share as a result of competitors' recent M&A activity: Business Objects and Hyperion Solutions face product integration risks and organizational realignment. He thinks Cognos benefits from a consistent strategy and an integrated product suite. He sees 92 cents fiscal 2004 (Feb.) earnings per share, and $1.11 for fiscal 2005. Maguire has a $33 target.