SAN FRANCISCO - Investors took back some of Cognos' ( COGN) prior-day gains Tuesday after the stock jumped on speculation it would be the next software takeover candidate.Cognos was down $1.60, or 3.2%, to $48.90 in late trading. Cognos closed at $50.50 on Monday, up 14 % Monday
Sell-side analysts brushed aside such arguments, saying the company is losing valuable time. "While yesterday we said that the SAP acquisition of Business Objects likely puts Cognos 'in play' and recognize that Cognos may now seek a buyer with some real sense of urgency, we also believe that Cognos may have lost some of its bargaining power," Roth Capital analyst Nathan Schneiderman wrote Tuesday in a note to investors. "There are fewer potential suitors, and Cognos may feel some time pressure," Schneiderman wrote. He lowered his rating to hold, but raised his price target to $54. Roth makes a market in Cognos. Jefferies analyst Robert Schwartz also lowered his rating to hold, suggesting the company's difficulty now is the stock price, which already anticipates a sale. Following Business Objects' acquisition, "Cognos would be the largest stand-alone BI vendor, and perhaps a more likely M&A target," Schwartz wrote in a note Tuesday. But Tuesday's trading range "already discounts the multiples paid by SAP for BOBJ and ORCL for Hyperion." Jefferies makes a market in Cognos. At Tuesday's trading range, Cognos trades at 24 times 2008 earnings. It expects to have $1.09 billion in revenue for the fiscal year that ends in February. Business Objects expects to have $1.53 billion in revenue for the fiscal year ending in December.