Satyam Computer Services' ( SAY) stock slipped on Monday after an analyst downgraded the stock on valuation concerns. Shares of the Indian IT services firm fell off 4.3%, dropping $1.80 to $40.55 in recent trading. After a strong rally in Satyam shares -- up 65 % in the past eight months -- "We are concerned about implicit expectations running too far," Bernstein analyst Rod Bourgeois wrote in a note on Monday, downgrading the stock to market perform from outperform. Still, he raised his target price to $45.50 from $41, in part because it is now using calendar 2007 to base earnings predictions instead of 2006. Bourgeois doesn't own shares of Satyam. Bourgeois wrote that he downgraded the stock because the company tends to offer conservative guidance, which is warranted. "We still worry that, at the stock's current valuation, implicit expectations seem somewhat steep relative to the guidance we anticipate." "A good portion (i.e., we estimate 51%) of Satyam's revenue prospects are somewhat contingent upon cyclical demand factors, which are tough to accurately predict beyond six months," Bourgeois added. Bourgeois also sees limits on the company's "ability to garner further multiple expansion." While demand for offshore services remains strong, Bourgeois also expressed concern for the sector as a whole -- in particular, Infosys ( INFY), which "could stymie valuation multiples" for others in the sector. Bourgeois observed that Infosys, a large company with high margins, presented disappointing earnings in January, and he sees hints of other execution issues, like growth slowing to the 30 % range, while both growth and margins are experiencing "periodic hiccups."