Robertson Stephens upgraded KPMG Consulting (KCIN) to buy from market perform.
Analyst Joseph Vafi says he was neutral on the company for about a year. He now thinks the risk reward ratio to KPMG's investment case has materially improved over the past several weeks. He notes the Street's forecasts were revised down closer to his estimates; he says a material pull-back in KPMG's stock price has created a more attractive entry point; he says there's a clearer global growth strategy given recent acquisition announcements.
Vafi think that while demand for U.S.-based consulting services does not seem to be improving as of yet, he believes it no longer deteriorating. He sees $0.56 fiscal 2002 (June) EPS, and $0.73 for fiscal 2003. He has a $20 target.