Lazard Capital downgrades ShoreTel (Nasdaq: SHOR) from Buy to Neutral, removing its $7 price target.

Analyst Ryan Hutchinson said that, while the firm has been a big proponent of ShoreTel in the past, recent departures suggest internal disruption, something the company doesn't need right now given that it is at a critical juncture. He comments, CEO Peter Blackmore announced his resignation in May and the search for a new head is in process. The company's head of strategy and the former CEO of M5, Dan Hoffman, followed shortly thereafter along with ShoreTel's SVP of Engineering. More recently, the CMO and head of IR have been confirmed to leave.

ShoreTel is also in the process of integrating is acquired hosted solutions (M5), ensuring the continued success of its core on-premise business unit, and right-sizing its legacy business cost structure. Hutchinson says, We view this transition as a non-trivial task, as the company has to manage an evolution consisting of different business models on diverging trajectories.

For the upcoming quarter, Lazard sees EPS of $0.02 and revs of $83 million as achievable.

For an analyst ratings summary and ratings history on ShoreTel, click here. For more ratings news on ShoreTel, click here.

Shares of ShoreTel closed at $4.16 yesterday.