Ahead Of The Bell: Corporate Executive Board

NEW YORK (AP) — William Blair & Co. upgraded consultancy Corporate Executive Board Co. to its highest rating Tuesday, saying corporate spending on consulting services will improve next year.

"We are increasingly hearing from professional services companies that while demand has not yet improved much yet, the tone of conversations with their clients is becoming more positive and its feels as though the trough in demand was probably reached this summer," wrote analyst Timothy McHugh in a note to investors.

He said that a visit to Corporate Executive's headquarters had reassured him that internal management problems wouldn't present a significant roadblock to benefiting from a recovery in the broader economy. The stock is an attractive buy right now, McHugh said, "even if we assume a very muted recovery in revenue and profit margins during the next few years."

Corporate Executive Board's problems started before the recession, McHugh said. Its lost subscriptions — and revenue — "could continue to haunt the company."

He upgraded the consultancy to "Outperform" from "Market Perform." William Blair is a market maker in Corporate Executive Board securities.

Shares of Corporate Executive Board closed up 42 cents, at $24.67 on Monday. The shares were not yet active in premarket trading on Tuesday.