Not fully recognized9 Apr 2009 19:39
The share price of data search software specialist Autonomy is fast approaching Piper Jaffray’s 1415p price target, but the broker is maintaining its ‘buy’ recommendation after Autonomy’s upbeat trading statement in which it said first quarter earnings would exceed market expectations.
Piper Jaffray believes the outperformance versus the broker’s estimates is for two reasons:
‘Firstly, … the acquisition of Interwoven was completed ahead of our expected timescale. During the period Intervoven's business traded in-line with management expectations. Secondly, the core Autonomy business traded ahead of expectations,’ the broker said.
US bank Goldman Sachs, which has the stock on its ‘conviction buy’ list, is similarly bullish.
‘We believe the underlying momentum in the business is likely stronger than 1Q2009 results suggest as we believe the company may not have fully recognized recently announced large contracts, providing the capacity for further estimate upgrades through the year,’ the bank said.
Meanwhile, broker Seymour Pierce has also reiterated its ‘buy’ recommendation for Autonomy and its 1559p price target.