Well-known

Merrill Lynch

analyst

Henry Blodget gave a bit of cautious love to

Microsoft

(MSFT) - Get Report

this morning, raising his near-term estimates on the Redmond, Wash., software maker.

In light of the company's strong March quarter, Blodget believes that the next quarter may come in slightly better than he had originally anticipated. He raised his revenue estimates to $6.5 billion from $6.4 billion and bumped his earnings projection up to 43 cents a share from 41 cents. In a research note, the analyst wrote that there appears to be a "slight upside" to Microsoft's June quarter revenue target of $6.4 billion to $6.5 billion and earnings projection of 41 cents to 42 cents, which should create support for the shares in the near term. Blodget also indicated that the company could possibly post a top line as high as $6.6 billion, with earnings of as much as 44 cents a share for the quarter.

The rosy hue of the note faded a little when it came to Blodget's longer-term estimates. "We do not see much upside for

management's FY02 EPS target of 1.90 - 1.94," he wrote.

But for the near term, "several catalysts could continue to drive multiple expansion," he wrote in the research note, indicating the releases of new software packages Office XP, Windows XP and the game console Xbox. "Conversely, delays in Windows XP or Xbox would likely prove negative catalysts (more psychological than financial)," he cautioned. The launches, though, appear to be on schedule.

Blodget previously expressed concerns prior to Microsoft's latest earnings report on April 20, just before the company beat consensus expectations. Blodget's rating on Microsoft remains accumulate, for both the near term and long term.

Wireless Services

Things may be looking up for this sector.

Goldman Sachs

analyst Paul Wuh started coverage of the wireless services sector today, handing out market outperform ratings on four stocks. Goldman also placed

Nextel Communications

(NXTL)

,

Sprint PCS

(PCS)

and

AT&T Wireless

(AWE)

directly onto the recommended for purchase list.

Wuh initiated coverage of

Dobson Communications

(DCEL)

,

Nextel Partners

(NXTP)

,

U.S. Cellular

(USM) - Get Report

and

TeleCorp PCS

(TLCP)

with market outperform ratings.

Wuh said that he was "positive" about the wireless sector and the group's potential for strong longer-term growth. He cautioned about the short term though, writing, "we believe there might be some volatility in wireless shares given the uncertainty in the equity market and the potential for downward revisions."

The analyst recommended overweighting the sector for those investors with a longer time horizon, "especially at current levels."

Auto-Parts Makers

Prudential Securities

analyst Michael Bruynesteyn initiated coverage of three auto-parts makers today, starting each at a hold rating.

The analyst wrote that growth prospects for

Dana

(DCN)

are limited considering the company's light backlog and the weak industry outlook for key businesses. He added that Dana's "large and stable dividend" was reassuring, "but not enough to warrant a buy rating." Bruynesteyn's price target on Dana was set at $20. The company closed trading yesterday at $20.37.

The analyst was slightly more positive on

Superior Industries

(SUP) - Get Report

, writing that while the hold rating was based on the stock's valuation, "we would view any price weakness as an accumulation opportunity." Bruynesteyn was also upbeat on

Johnson Controls

(JCI) - Get Report

, an automotive interior parts maker, saying "interiors is the game to be in if you're an automotive supplier, and JCI is the leading player."