Ahead Of The Bell: Hewitt Associates Upgraded

NEW YORK (AP) — Hewitt Associates Inc. is adding new contracts and its consulting revenue should get a boost as corporate spending recovers, a Deutsche Bank analyst said Wednesday as he upgraded the human resources consulting and outsourcing company.

Revenue will increase in the coming quarters, accelerating profit growth, as the consulting business improves alongside the economy, said analyst Paul Ginocchio in a note to investors. He raised his rating to "Buy" from "Hold."

On Tuesday, the Lincolnshire, Ill., consultancy said its fourth-quarter profit more than doubled on lower operating costs, and offered profit guidance that beat Wall Street expectations.

"While we are seeing some positive signs in terms of customer demand, our guidance is not dependent on a meaningful recovery," said Russ Fradin, chairman and CEO, on Tuesday.

Meanwhile, Hewitt is adding new clients in its HR outsourcing division, despite losing accounts to bankruptcy and mergers.

That should lift the stock, Ginocchio said. He boosted his price target by $20 to $55.

Hewitt shares closed at $39.78 Tuesday.