Morgan Keegan upgrades customer-service software company Aspect Communications (ASPT ) to outperform from market perform.
Analyst Tavis McCourt says he upgrades on valuation. He says after a 20% decline year to date, he believes Aspect shares offer a compelling risk reward given 10.7% free cash flow yield and EV/EBITDA of 6.3 times, a 33% discount to its broad peer group.
He says recent performance suggests Aspect is beginning to take market share, which should lead to turnaround in service revenues and a return to positive year-over-year revenue growth over the remainder of 2005.
McCourt sees 60 cents 2005 earnings per share and 71 cents 2006 earnings per share.