UPDATE: Citigroup Downgrades Polycom to Neutral on Lowered EPS Projections

Citigroup reduced its rating on Polycom

from Buy to Neutral and lowered its price target from $15 to $10. Citigroup said, "We are downgrading the shares from Buy to Neutral on a material reduction in our EPS projections (2012 and 2013 non GAAP EPS estimates go to $0.67 and $0.57 from $0.90 and $1.08, respectively given lowered sales and margin outlook) and lower our target price from $15 to $10 (with a 25% valuation discount to the market similar to other tech companies in transition). We acknowledge the stock is down 43% year to date as well as down -43% since our upgrade on December 20th, 2011. However, we believe the company's transition to a more software based model will over the 12-18 months pressure Polycom's earnings ability as the company has traditionally relied on its hardware strength." Polycom closed at $9.11 on Tuesday.