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UBS Cuts Navteq to Neutral

Analyst Maynard Um is looking for better visibility, earnings consistency, and more attractive valuations

UBS Financial downgraded Navteq (NVT) to neutral from buy, after the company posted quarterly earnings.

Analyst Maynard Um says 18 cents first quarter pro forma earnings per share (EPS) came in 3 cents below the Street consensus. He believes the risk remains into the second quarter. He notes he still believes long-term industry fundamentals remain sound. He believes continued investment for future growth and opportunities today is prudent. However, he would look for better visibility, earnings consistency, and more attractive valuations before building or adding to positions. He lowers his $1.29 2006 pro forma EPS estimate (excluding options expense and 1 times benefits) to $1.26, and trims his $1.58 2007 estimate to $1.57. He cut his $60 price target to $53.

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