FleetBoston Financial ( FBF) is on the road to recovery, according to an analyst at U.S. Bancorp Piper Jaffray, who upgraded the stock and raised his estimates on the bank.

Analyst Andrew Collins said in a research note Monday that the bank has considerable franchise value and could experience a faster-than-expected credit recovery in the next year.

"FleetBoston possesses substantial franchise value as one of the most attractive middle-market lending franchises in the country," said Collins, who upgraded the company to outperform from market perform and raised his EPS estimates.

Usually, the middle market is the first to experience a recovery after an economic downturn, which could be very important to prospective acquirers, Collins said. "The company's growing investment management practice addresses a financially attractive market and helps to diversity the earnings stream."

The brokerage firm raised its 2003 EPS estimate to $2.50 and its 2004 estimate to $2.80. On average, analysts polled by Thomson First Call expect $2.36 a share in 2003 and $2.71 a share in 2004. The company earned $1.18 a share in 2002. Revenue estimates were raised to $11.4 billion in 2003 and $12 billion in 2004, largely in line with analysts' consensus.

"FleetBoston could be positively impacted by its redirected strategy of focusing resources on its core businesses, namely within Personal Financial Services and Commerical Financial Services," Collins concluded.

Shares of FleetBoston were gaining 40 cents, to $29.97.

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