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Macromedia Growth Spurred By Internet Advertising

Piper Jaffray maintained an "outperform" rating and $41 target price on Macromedia (nasdaq: MACR - news - people ), saying the software company will see the benefits of new products in 2005 along with "a refresh" of some of its core offerings. "We believe that strong spending on Internet advertising will continue to lead to outperformance in Macromedia's designer/developer segment," Piper Jaffray said. The research firm said Macromedia customers are increasing spending on Web development to keep up with overall demand and ensure they can offer clients the most cutting-edge final product. "We believe Macromedia has room to improve its operating margin," Piper Jaffray said. Macromedia's 17% margin lags Piper Jaffray's broader software comp group, whose margins range between 20% to 30%. For fiscal 2005 and 2006, Piper Jaffray estimates earnings per share for Macromedia of 82 cents and 98 cents, respectively.
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