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Upgrades Spark BMC Software

The stock rises nearly 5% as two analysts see better times ahead.
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With a fourth-quarter earnings report just two days away, shares of

BMC Software


are moving on the strength of upgrades by two analysts.

In recent trading on Monday, shares were up $1.01, or 4.9%, to $21.72.

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Goldman Sachs analyst Sarah Friar upgraded the company to in-line from underperform, sketching a number of possible scenarios that would likely help the stock. "Significant stock repurchase, further cost-cutting initiatives, a willingness to better segment the declining and growth businesses and invest accordingly, and signs that further cash could be raised by leasing, or even selling, unused buildings should be a positive for BMC's more value-oriented shareholder base."

Friar added that the measures could make BMC a more attractive target for a private equity takeout, a move that has been rumored for some time.

BMC is seeking investment-banking business with BMC.

Piper Jaffray analyst David Rudow upgraded the stock to outperform, saying, "In our opinion, BMC's management is doing all the right things to add shareholder value including cutting costs, buying back $100 million worth of shares per quarter, finding ways to unlock asset value, and streamlining the business to better position it for growth." His company does not have an investment-banking relationship with BMC.

BMC, which sells system management software, will report fourth-quarter earnings after Wednesday's closing bell. Analysts polled by Thomson First Call are looking for a profit of 29 cents a share on revenue of $400.4 million.