Monday, January 10, 2011

Stay on Sidelines with Lawson Software (NASDAQ:LWSN) Says Barclays

Citing need for improvement in licensing trends, Barclays (NYSE:BCS) recommends for investors to stay on the sidelines with Lawson Software (NASDAQ:LWSN) until that happens.

Barclays said, "Remain on Sidelines Pending Improving License Trends: Lawson reported overall disappointing Q2 results due to weaker than expected M3 license sales (M3 license bookings declined 40% y/y). While healthy S3 growth provided some offset, organic license sales overall contrast with a generally improving applications industry and merit concern in our opinion.

"We are raising our Q3 rev estimate to $191M from $186M for inclusion of roughly $3 M Enwisen subscription revenue and higher maintenance/consulting, somewhat�offset by lower expected license revenue. We are lowering our Q3 EPS estimate to�$0.12 from $0.13 for lower license mix. Similarly, we are raising our FY11 revenue estimates to $770M from $754M and lowering our FY11 EPS estimate to $0.50 from $0.51."

Barclays maintains an "Equalweight" on Lawson Software, which closed Friday at $8.75, losing $0.54, or 5.79 percent.

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