Our downgrade reflects our concern about economic developments.
Despite the European Union's plan to resolve Greece's debt
crisis, we believe economic growth in Europe will be impeded by
either higher taxes or lower spending as governments try to
reduce their budget deficits. We think PMTC will be more
adversely affected than many other IT companies due to its
exposure to Europe, which accounted 40% of FY 09 (Sep.) revenues.
In addition to weaker growth, we see headwinds from foreign
currency exchange. We keep our FY 10 EPS estimate of $0.48 and
our target price at $16.