An analyst downgraded Savvis Inc. Tuesday, citing growing expenses and "limited evidence of improving operations" for the provider of computer network services.
Jefferies analyst Jonathan Schildkraut lowered his rating to "Hold" from "Buy" and cut his target price to $17 from $20.
The analyst said in a note to investors that the market for large-scale managed hosting projects _ an important business for Savvis _ remains "lukewarm." Customers, he added, "continue to drag out the sales cycle" due to the economic downturn.
Schildkraut, who had upgraded Savvis to "Buy" in late July, said Tuesday while the company's third-quarter results "may not see a meaningfully negative impact" from the slowdown in IT investment, he is more cautious about 2009 expectations.
The analyst also increased his capital expenses estimates for the company for 2009 and beyond.
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