Morgan Keegan Upgrades Aspect Communications

Analyst Tavis McCourt believes the customer-service software company will see a turnaround in service revenues and a return to positive revenue growth

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.

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