Savvis: Jefferies Downgrades to Hold; Sees Rising Capex
Jefferies analyst Jonathan Schildkraut this morning cut his rating on Savvis (SVVS) to Hold from Buy, citing “decreasing visibility and a belief the company will need to spend more in capex.” He notes that since the Web-hosting company reported Q2 results, its shares have appreciated 8 percent in period in which its peers have fallen by an average 14 percent.
Schildkraut says channel checks find that the market for large-scale managed hosting projects “remains lukewarm, as customers continue to drag out the sales cycle.” At the time, he said that based on conversations with other managed hosting providers, he now thinks his old capex estimates for the company were too low.
