Benzinga's Top Downgrades With Color for April 27, 2012

Listed below are today's Top Downgrades at Benzinga:

: Canaccord commented in the report, "With the report and associated commentary, we now question if the business model will be capable of competing in a market where data has become more important than text and voice. We find astonishing that Sprint's management was reportedly ready to sign off on an acquisition of PCS in the past two months alone. We are cutting our price target to $9.00 from $16.00."

: Citi commented in the report, "We are moving to the sidelines on APD as the Merchant Gases and Electronics businesses remain challenged, as evidenced by a ~2% decline in EPS in 2Q, while competitors Praxair and Air Liquide have shown better growth. Much rides on a 2H12 recovery at APD, and an economic soft patch similar to 2H11 poses a risk to EPS growth. We remain positive on the industrial gas business model given long-term take or pay contracts, but see better value elsewhere in the sector."

: Jefferies said, "Poor operating results, weak bookings, a Board room power struggle, and reporting changes (to add confusion) are enough to downgrade. Delays around ADX 1.5 diminishes MDRX's ability to put up a fight against Epic and Cerner's (CERN, $73.82, NC) inpatient share gains. The value we saw in MDRX's ambulatory base also could deteriorate, as a preoccupied management team tries to steady the rudder."

: Piper Jaffray commented in the report, "Order losses and pushouts, primarily from smart energy end markets, have taken down expectations. Demand response and energy management orders are softer than previously expected as some customers have slowed orders or programs have been discontinued. DGII has also seen a migration away from its Rabbit product line (13% of 2011 revenues), which it projects will be down 5-15% in FY12. Management has lowered FY12 revenue and EPS guidance to $190-$200m (previously $210-$235m) and $0.26-$0.38 ($0.38-$0.64 previously)."

: Piper Jaffray said, "Allscripts pre-announced Q1 results well below expectations, announced the departure of four board members (including the chairman of the board), and the departure of the CFO. Any one of these items would be a concern, but all three happening simultaneously leads us to question what else is there that we don't know. If it were just a sloppy bookings quarter, we could live with that. But our rule of thumb is to downgrade on any CFO turnover. Add to that the board shakeup, missed quarterly numbers, lowered guidance, and overall poor execution, and we have nothing left to defend."

: Deutsche Bank explained, "Our updated model now reflects an outlook for net subscriber losses during the next 2 quarters due to a pause in marketing ahead of the planned LTE re-launch in 4Q, and intensifying competition. This pullback in promos may boost EBITDA and cash flow near term, but will likely elevate investors' concerns as the business drifts through the seasonally slow spring and summer. While the stock is arguably cheap following its recent decline, we believe the next potential positive catalyst is a return to more robust sub growth in 4Q and are therefore moving to the sidelines until visibility improves."

: Canaccord said, "Maxwell missed slightly our and consensus estimates for Q1 and also lowered its full year implied guidance. Revenues were $39.2M, compared to consensus and our $40.4M estimate. GAAP EPS were $0.02, lower than our $0.04 estimate but in line with consensus. Guidance was lowered to annual growth of 15% - 20%, down from an implied 25% - 30% previously."

: Langenberg said, "Fundamentals are excellent, the deal pipeline is full and there was nothing in the quarter to change our view about the performance of the management team or the value of the company. Ametek is at our $50 target and we have a choice - raise the target or downgrade. We are doing both."

: Bank of America said, "Western Digital (WD) management provided unexpected commentary on their F3Q12 earnings call, and we are downgrading Seagate to Neutral, along with Western Digital (WD, C-2-9, $44.10). While WD reported significantly better than expected F3Q12 EPS at $2.52 vs. our/Street $1.60/1.55, driven by revenue and margin. Guidance was disappointing (EPS of $2.35-2.55 vs. our/Street $2.67/2.30) and commentary pointed to softer demand than expected going forward, at current/elevated ASPs levels, and some pricing concessions (certain HGST customers, pre-acquisition)."

: Bank of America said, "WD reported significantly better than expected F3Q12 EPS at $2.52 vs. our/Street $1.60/1.55, driven by revenue and margin. WD guidance was disappointing (EPS of $2.35-2.55 vs. our/Street prior $2.67/2.30) and commentary pointed to softer demand than expected going forward, at current/elevated ASPs levels, and some pricing concessions (certain HGST customers, pre-acquisition). It appears the HDD industry can't have it both ways for much longer – pricing/margins at high levels, and expected strong demand, with assumed channel inventory refill. We step to the sidelines for now, despite attractive valuation."

: Canaccord commented, "We are downgrading DECK to HOLD from BUY as the central tenets of our thesis (retail and international growth) have become clouded. Europe's macro headwinds are crimping demand while negative international retail comps are alarming, since this is where the majority of new store openings are planned. While there were some positives of note (potential sheepskin price easing in 2013, strong trends in men's/kids, good UGG spring sell-through), we are less sanguine about international growth prospects and see potential risk to current estimates as investments in brand building in the UK and Asia are needed and will take time to drive the brand's penetration."

: Compass Point commented, "Green Dot is positioned to continue winning share of the untapped unbanked market of 17M households. Although, penetration is already more than 10M households. To further drive growth, the company targets the larger underbanked market of 143M households. This market is highly competitive and Green Dot is working to develop a differentiated offering (in part through Loopt), but future success is uncertain and the transitional period warrants caution. Near-term, however, we forecast the untapped unbanked market opportunity to support revenue growth of +20% through 2013. With no debt, net cash per share is $4.24. Our revised $30 price target equals 14x our estimate of next year's EPS. Our lowered target multiple of 14x (20x previously) more heavily weights the risks of the transitional period."

: Wunderlich Securities said, "We are downgrading shares of Applied Micro Circuits (AMCC) to Hold from Buy and lowering our price target from $8 to $6.50 following what should be a weaker period for the company's core business. With the company's core business set to decline 15%-20% sequentially for the June quarter, we believe there is a lack of near-term catalysts to move the stock. We still believe the X-Gene product should provide significant value to the company, but with the next significant milestone likely to be December at the earliest, we expect shares to be range bound for the time being."