The slowing economy is taking a toll on corporate IT budgets, Friedman Billings Ramsey analyst David Hilal warned in a series of research notes Wednesday morning.

Hilal wrote Wednesday that “the lagging nature of software sales cycles and the nature in which IT budgets are set and modified have helped to temporarily shield” the enterprise software companies from the current economic headwinds. However, Hilal sees a change coming, with a softer IT spending environment likely to adversely affect the companies and their stock prices in the second half of this year and into early 2009. In fact, Hilal says he expects IT spending growth in 2009 of less than 4%, which would be the slowest rate of increase since 2003.

In anticipation of a difficult period ahead for enterprise software, Hilal today cut his ratings on a number of companies. He lowers Kenexa (KNXA) and Web.com (WWWW) to Market Perform from Outperform; McAfee (MFE) goes to Underperform from Market Perform. He repeated his Underperform rating on Salesforce.com (CRM), and his Market Perform rating on Teleo (TLEO).

Hilal maintains his $25 price target on Kenexa, while cutting his target on Web.com to $7 from $9. His MFE target remains $33.

Hilal also cut price targets on a range of other companies:

  • Akamai (AKAM) remains Market Perform rated, but his price target drops to $26 from $33.
  • Comverse (CMVT) also remains Market Perform rated, but his target drops to $16 from $21.
  • Omniture (OMTR) remains Outperform rated, but his target is now $22, down from $26.
  • Secure Computing (SCUR) remains Market Perform rated, while his target drops to $4.75 from $5.25.)

In Wednesday’s trading:

  • McAfee is down $1.23, or 3.1%, to $38.57.
  • Web.com is down 37 cents, or 6.2%, to $5.61.
  • Kenexa is down 90 cents, or 3.9%, to $22.47.
  • Taleo is up 34 cents, or 1.4%, to $24.28.
  • Salesforce.com is down $1.56, or 2.8%, to %53.59.
  • Akamai is down $1.24, or 5.7%, to $20.59.
  • Comverse is down 2 cents, or 0.2%, to $13.70.
  • Omniture is down 15 cents, or 0.9%, at $17.45.
  • Secure Computing is down 7 cents, or 1.6%, to $4.44.