Legg Mason upgraded Manugistics (MANU) to strong buy from buy.
Analyst Paul Krieg says he thinks the company will post in-line Q4 (Feb.) results showing a sequential rebound, and says Manugistics is distancing itself from the worst of a spending trough. He notes the company has shifted to a contracting methodology that spreads revenue from its largest deals into multiple quarters, dampening posted results in an individual quarter but lessening the chance that the timing factors of a few deals could lead to disappointment.
Krieg says he expects an improving spending outlook for the company's products this year, as customers recover from their exposure to the recession. He sees a $0.28 fiscal 2002 loss, and $0.03 fiscal 2003 earnings per share (EPS), as well as $0.27 fiscal 2004 EPS. He has a $23 12-month price target.