UPDATE: Compass Point Downgrades MICROS Systems on Stalled Growth

In a report published Monday, Compass Point analyst Douglas Greiner downgraded the rating on MICROS Systems MCRS from Buy to Neutral, but reiterated the $45.00 price target.

In the report, Compass Point noted, “We downgrade our rating from Buy to Neutral. We upgraded the stock on November 28th, 2012 at $43.15 expecting organic growth improvement this fiscal year. However, this view did not materialize. In fact, organic revenue growth turned negative in the most recent quarter. Reviewing what went wrong with our upgrade we find that the growth outlook is more concerning than we initially thought. Macro pressures are the primary culprit of the weakness. Looking forward, economic forecasts for 3 of the company's 4 end markets, including the two largest exposures North America and EMEA, are not encouraging. Beyond the macro, we also find that there is small but building concern surrounding the Restaurant vertical (~38% of total revenue) where there is increasing competition from companies like Square and NCR's Radiant Systems. Our $45 price target is unchanged and equals 13.5x our estimate of FY'15 Adjusted EPS excluding today's net cash.”

MICROS Systems closed on Friday at $42.19.