First Albany Upgrades Blue Coat Systems

Analyst Scott Zeller believes there is substantial improvement in the web security appliance company's risk/reward profile

First Albany upgrades web security appliance company Blue Coat Systems (BCSI ).

Analyst Scott Zeller says he is upgrading Blue Coat Systems to buy from neutral with a $30 price target.

He bases his upgrade on several risk factors being mitigated in the past several weeks, solid fourth-quarter results, strong forward guidance, and continued positive field checks on Blue Coat Systems products.

Zeller notes several cautionary points on Blue Coat Systems have been addressed, including Sarbanes-Oxley, costs of lawsuits, and third-party revenues. He says, while risk remains (SEC), he believes there has been substantial improvement in the risk/reward profile at Blue Coat Systems.

He raises his 70 cents fiscal 2006 (ending April) earnings per share estimate to $1.03, and sees $1.60 fiscal 2007 earnings per share.

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