Adobe Systems slides on BofA downgrade

Adobe Systems shares fell $6.13, or 8 percent, to $69.75 Monday after Banc of America Securities cut the software developer from a "buy" rating to a "market perform."

Banc of America Securities analyst Greg Vogel said he downgraded the stock because of its lofty valuation and increased risk near-term.

"Adobe has exceeded our prior price target of $73 and is now trading at 57x our 2001 EPS forecast of $1.33," he wrote in a research note. "Adobe is up 126 percent year-to-date on what have been strengthening fundamentals, however we believe performance -- both margin expansion and revenue growth acceleration -- has leveled off. "

Adobe (Nasdaq: ADBE) shares were trading at a price-to-earnings ratio of 63.76 following Monday's sell-off.

In its latest quarter, Adobe hurdled analysts' estimates, earning $78.3 million, or 61 cents a share, on sales of $328.9 million.

First Call Corp. consensus expects it to earn 29 cents a share in the fourth quarter and $1.31 a share in fiscal 2001.

The stock moved up to a 52-week high of $87.31 earlier this month after falling to a low of $26.69 in February.

Fourteen of the 16 analysts tracking the stock rate it either a "buy" or "strong buy."