Lehman Brothers has slashed its price target for Check Point Software Technologies (Nasdaq:CHKP) from $50 to $35 after the Israeli data security provider's results warning.
Check Point pre-announced that its third-quarter revenues will reach $118 million at most, or $117 million. Beforehand it had anticipated Q3 revenues of $135 million.
Lehman analysts Tobias Fischbein and Israel Hernandez reiterated a Buy rating for the share, but add, "we would not be aggressive buyers at current levels", of $26 per share, until the Q3 situation clears up.
They expect Q3 earnings of 28 cents per share, compared with previous estimates of 39 cents per share.
For the year 2001, they see revenues of $530 million instead of $568 million, and earnings of $1.23 per share instead of $1.32.
They also lowered their 2002 forecasts to $585 million, from $666 million, and EPS to $1.39 from $1.55.
On the upside, Fischbein and Hernandez view Check Point's multiple of 21 times expected 2001 earnings at not "terribly expensive" given the company's track record.