Downgrade dents Conexant Systems

Communications chipmaker Conexant Systems Inc. (Nasdaq: CNXT) plunged 18 5/8, or 16 percent, to 97 Monday after SG Cowen downgraded the stock from a "strong buy" recommendation to a "buy."

Analyst Rick Billy cut his fiscal 2000 earnings estimate from $1.08 a share to $1.03 a share but left his fiscal 2000 estimates unchanged.

"The price-earnings ratio is no longer compelling at these levels, and there are other stocks in the group one would want to hold ahead of Conexant," Billy said in a research note.

Even after Monday's slide, Conexant shares are still trading at a price-to-earnings ratio of more than 192.

Leading competitor Broadcom Corp. (Nasdaq: BRCM) fell 7 1/8 to 183 7/8 Monday. Its shares are trading at a price-to-earnings ratio of 530.

In its first quarter, Conexant raked in $51.8 million, or 24 cents a share, on sales of $510 million.

First Call consensus expects it to earn 19 cents a share in the second quarter and 87 cents a share in the fiscal year.

The stock surged to a 52-week high of 132 1/2 earlier this month after falling to a low of 8 1/2 last February.

All 15 analysts tracking the stock maintain either a "buy" or "strong buy" recommendation.