Salomon Smith Barney upgrades Veritas Software (VRTS) to buy from outperform, and raises its price target from $40 to $56.
Analyst Clinton Vaughan says VRTS has seen a significant pickup in training session attendance which he believes points to future business. Although high, he thinks the stock's valuation is attractive.
He believes VRTS will beat his $0.60 '02 EPS estimate. He notes that during '94-'97, the Street estimates for VRTS were about 18% understated, and up to 43% understated during pivotal turning points. Says his 23% '02 operating margin assumption is low and will be going up in future toward historical averages of 30% and more. He also sees potential upside to his revenue estimates.