J.D. Edwards soars on analyst upgrade
Shares of the enterprise resource planning software company hits a 52-week high after analyst Steven Cohn with SoundView Technology Group upgraded the company to a "strong buy."
Shares of J.D. Edwards soared to a high of $43 from yesterday's close of $31.56. Shares closed today up $7.44, or about 23 percent, at $39.
The company was upgraded to a "strong buy" from "buy" by analyst Steven Cohn with SoundView Technology Group.
J.D. Edwards, which competes in the ERP software arena that automates back-office systems, is experiencing pent-up demand by investors seeking lower priced stocks in this market, said William Lanzon, an analyst with ING Barings, who also has a "strong buy" recommendation.
"People are looking for ways to play the rebound in the ERP market and J.D. Edwards is a low risk name," Lanzon said.
J.D. Edwards, for example, has a price-to-earnings ratio or 22, while SAP and Oracle are much more expensive stocks to buy with P/E ratios of 98 and 94, respectively. Baan, which has been struggling with a reorganization and the departure of its CEO, has a ratio of 34, while PeopleSoft--which has also faced similar challenges--has a ratio of 24.
"1999 was an abysmal year for the ERP market and J.D. is ideally situated to take advantage of the recovery," said Cohn.
He added the company has beefed up its supply chain and procurement with the help of partners, while competitors such as SAP are moving to catch up. And Cohn noted that J.D. Edwards also ramped up its sales force in late 1999 while others were scaling back, as it worked to install a seasoned team to handle the recovery.
"Everyone else is still trying to figure out what applications they will have," Cohn said.