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UPDATE 1-RESEARCH ALERT-Piper Jaffray cuts Allscripts to neutral

Wed Sep 3, 2008 6:36am EDT

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Sept 3 (Reuters) - Piper Jaffray downgraded clinical software provider Allscripts Healthcare Solutions Inc (MDRX.O) to "neutral" from "buy," citing customers' cautious outlook on the pending merger with Misys Plc's (MSY.L) healthcare unit.

In March, British software company Misys said it would merge its healthcare arm with Allscripts. [ID:nL18778304]

The brokerage said 43 percent of clients surveyed expressed cautiousness on the pending merger, while only 27 percent were supportive.

The gap is wider among practices with more than 100 physicians, with 88 percent saying they were cautious, the brokerage added.

Piper Jaffray, which cut its price target on Allscripts stock by $3 to $15, lowered its long-term earnings growth estimate for the company to 15 percent from 30 percent.

"Therefore, we are lowering our post-merger price target to $10," the brokerage added.

Shares of Allscripts closed at $14.90 Tuesday on Nasdaq. (Reporting by Adveith Nair in Bangalore; Editing by Himani Sarkar)

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