Shares of software developer
rose Tuesday after Lehman Brothers upgraded the stock based on the company's raised guidance.
Lehman upped the stock to overweight from equal weight and raised its fourth-quarter profit forecast to 12 cents a share on $125 million in revenue, from a previous forecast of 11 cents and $118 million.
For fiscal 2003, Lehman now expects the company to earn 56 cents a share on $498 million in revenue, compared with prior estimates of 50 cents and $486 million. The brokerage also raised its price target to $15 from $7, implying a valuation of 25 times projected 2003 earnings.
"We view such a preannouncement so early in the quarter as extraordinary and a potentially positive precursor for the infrastructure software sector as we move through what is normally a seasonally stronger fourth quarter," wrote analyst Israel Hernandez in a research note. "Our upgrade reflects our expectation that Citrix shares should outperform over the near term, irrespective of the overall direction of the tech market."
The stock was up $1.29, or 11.3%, at $12.74 in recent
trading. Heading into Tuesday's session, Citrix was up about 130% since hitting a 52-week low of $4.70 back on July 9 of this year.
On Monday, the Fort Lauderdale, Fla.-based company raised its fourth-quarter earnings outlook, but said that "continuing uncertainty" in information-technology spending persists. The company expects to post a net profit of 12 cents to 17 cents a share, excluding the amortization of goodwill related to acquisitions.
Wall Street analysts were expecting the company to earn 12 cents a share, according to a poll conducted by Thomson Financial/First Call. Total revenue for the quarter ended Dec. 31 is targeted between $120 million and $130 million, ahead of the consensus estimate of $118.1 million.
"While Citrix is not out of the woods long term, the last two quarters of data suggest a bottoming in Citrix's core business," Hernandez said.
The company's president and chief executive officer, Mark Templeton, is scheduled to make a presentation at the CSFB Technology Conference in Scottsdale, Ariz., Wednesday afternoon. Other top-level executives will be making presentations at conferences in Europe between Dec. 3 and Dec. 5.