BROKERWATCH Software AG price targets upped at Merrill Lynch, Deutsche Bank

LONDON, Jul 24, 2008 (Thomson Financial via COMTEX) -- STWRY | Quote | Chart | News | PowerRating -- Merrill Lynch and Deutsche Bank have raised their price targets on Software A.G. to 58 euros and 50 euros respectively, following the group's second-quarter results on Wednesday, dealers said.

In a note, Merrill Lynch -- keeping a 'buy' rating on the stock -- lifted its price target from 49.3 euros to 58 and raised 2008 and 2009 earnings estimates for the group by 5 percent.

The broker said its new price target puts the stock on 15 times 2008 estimates and 13.5 times 2009 estimates, in-line with other slower-growing software companies such as Sage Group Plc. and Misys Plc.

Meanwhile, Deutsche Bank -- which lifted its price target to 50 euros from 47 euros -- kept a 'hold' rating on the stock, saying it sees some short-term upside.

It said the group had a strong quarter, in which it showed it can execute well in a tough environment.

But it cited the lack of organic growth in the key earnings contributor ETS as the main reason it is not upgrading the stock, despite the cheap valuation and "obvious underperformance". hannah.benjamin@thomsonreuters.com hmb/jfr

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