Ahead Of The Bell: Corporate Executive Board

NEW YORK (AP) — A Deutsche Bank analyst downgraded Corporate Executive Board Co. on Tuesday, saying Wall Street and investors are too optimistic about the corporate strategy and human resources consultancy's earnings growth next year.

Corporate Executive's shares have nearly doubled since hitting a 12-month low in March, according to Thomson Reuters data. The stock is up about 25 percent since announcing second-quarter results earlier this month; the Standard & Poor's 500 stock index is up 1 percent since then.

In a note to investors, Deutsche Bank analyst Paul Ginocchio said the rebound in shares and Wall Street analysts' expectation of a $1.34 per share profit in 2010 was too optimistic and downgraded the shares to "Sell" from "Hold."

He expects profit of 92 cents per share in 2010. The company hasn't released guidance for 2010, but has forecast per-share profit of between 90 cents and $1.40 this year, in line with analysts' expectations of $1.33 per share.

Corporations have slashed their budgets, weighing on the sales of consultancies such as Corporate Executive Board. Ginocchio said that even when companies' spending grows as the economy recovers, they're not going to immediately rejoin Corporate Executive Board's programs. He expects lost members to come back slowly.