Bear Stearns Cuts PalmOne
Bear Stearns cuts PalmOne (PLMO ) to underperform.
Analyst Andrew Neff says PalmOne faces multiple challenges: slowing growth rate, high channel inventory (both PDA and Treo), increasing competition, and a hardware only business model with one hit product.
He says second-quarter Treo shipments are below Street estimates, and third-quarter guidance are meaningfully lower due to slower Treo/carrier ramp, seasonal PDA weakness, and high channel inventory.
Neff cuts his 39 cents third-quarter earnings per share estimate to 21 cents, $1.80 fiscal 2005 (ending May) to $1.60, $2.15 fiscal 2006 to $1.80, and $2.40 fiscal 2007 to $1.95. He notes a year-end calendar year 2005 fair value target of $29 to $32 implies a further downside.
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