Oscar Gruss Downgrades Fundtech Ltd. (FNDT) to Hold; Growth Still A Concern

August 5, 2009 9:39 AM EDT

Oscar Gruss downgrades Fundtech Ltd. (Nasdaq: FNDT) from Buy to Hold. Price target $11.

Oscar analyst says, "We positively view the pick up in the company’s US business and believe that FNDT is well positioned to benefit from a recovery in IT financial spending in this region. In addition we assume that consolidation in the U.S financial sector may hold prospects for FNDT to win an additional tier-1 account in this geography...Given company's mild guidance for 3Q09 we would conclude a much stronger 4Q09. Thus, we are amending our 3Q09 revenue and EPS estimates to $29.6M/$0.13 and $115.1M/ $0.47 for the year."

"Risks. Our Concerns are growing from a quarter to quarter as economic slowdown has spilled over from the US to Europe. We emphasize the company’s 100% exposure to the financial sector. We note budget reductions on IT spending across the sector may reflect on the company's sales. FNDT is already experiencing longer sales cycles, and we highlight that the present disarray in the banking world may cause further deal delays and loose the deadlines previously established by regulators. Failure to sign follow-on agreement with Barclays."

To see more analyst ratings on FNDT Click Here.

Fundtech Ltd. provides end-to-end financial transaction processing software solutions for financial institutions Israel and internationally.

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• Oscar Gruss
• Barclays

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