Parametric Technology (PMTC) shares were lower Tuesday following a downgrade by Jefferies & Co. analyst Ross MacMillan. MacMillan dropped his rating to Hold from Buy; he has a $20 price target on the stock. MacMillan reduced his EPS estimate for the September 2007 fiscal year to 97 cents a share from $1.03; for ‘08 he goes to $1.03 from $1.10.
MacMillan writes that he now thinks his prior software license numbers for the fiscal fourth quarter were “too ambitious,” and that “compares will stay tough.”
“The company is up against double-digit license growth compares for the next three quarters, and we think organic growth will be in the 5%-plus range,” he writes.
We also think that the U.S. spending environment is just OK. Finally, while we don’t think the competitive situation is changing much, we believe that we are entering a period of greater uncertainty.
PMTC 1-yr chart: