After running up 25% since the beginning of the year, has BEA Systems ( BEAS) become overvalued? Sanford Bernstein analyst Charles Di Bona thinks so, and his Monday morning downgrade has knocked 3% off the share price. Interestingly, Di Bona raised his price target by $1 at the same time he downgraded the stock to underperform from market perform, saying "the growth rate embedded in BEA's current valuation is excessively optimistic." Di Bona noted that BEA's stock currently trades at a multiple of 41 times 2007 earnings (including the expense of stock options), more than twice that of Microsoft ( MSFT), and is growing at a relatively modest rate -- 12.5% in fiscal 2006 and an expected 12.7% in 2007. Discounting options, the stock trades at a much more modest 24 times earnings. BEA, the analyst said, has become increasingly dependent on a relatively small number of large deals, which increases the potential volatility of quarterly earnings. In the last quarter of 2006, some 28% of total license revenue came from deals greater than $1 million. Di Bona said he raised his price target to $9 from $8 to reflect some improvement in the company's core business. His company doesn't have a current investment banking relationship with BEA Systems. BEA sells middleware -- software used to knit together disparate applications in a complex business environment. It competes with IBM ( IBM) and Oracle ( ORCL), and is often talked about as a takeover target, although the share run-up makes that less likely, says Di Bona. In recent trading, shares were off 35 cents, or 3%, to $11.38 on heavy volume.