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Check Point Software Technologies (CHKP) - Get Check Point Software Technologies Ltd. Report has been downgraded by Bank Hapoalim analyst Racheli Gershon from buy to hold.

Check Point showed record results in the third quarter, but compared with similar Internet-security companies, it is priced high, Gershon says.

But she says that Check Point, which trades at a market cap of $25 billion, is considered the market leader. She therefore sets its future price/earnings ratio at a range of 110 to 115, and accordingly boosted her 12-month target by $36 to $196.

Her new target is just 16% above the company's current price, hence her downgrade. Gershon calculates that Check Point will record sales of $417 million in 2000, 90% more than in 1999 and estimates that the company will net $204.5 million, and report earnings of $1.17 a share this year.

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The company's rate of growth will slow a bit in 2001, she believes, resulting in annual sales of $651 million, up 56% from 2000. The company will net $312.2 million in 2001 and earn $1.75 a share.

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