Robertson Stephens upped its investment on networking solution company Redback Networks (RBAK ) to strong buy from buy on the stock's attractive price and the belief that Redback is poised to post strong fourth quarter results next week. The stock gained 4-5/8, to 40-1/8.
Analyst Paul Johnson says the stock fell recently on concerns about the exposure that the company's subscriber management system business has to the same negative trends among independent digital subscriber line (DSL) equipment vendors in the DSL market. He said growth in DSL line deployment is driving demand for that part of the company's business.
Johnson says fourth quarter results will help settle some of the issues plaguing the co and highlight its attractive valuation. He sees fourth quarter per share earnings of $0.05, $0.04 in 2000 and $0.22 in 2001.