Banc of America Ups Tektronix to Buy from Neutral

Cites the company's quarterly results and outlook

Banc of America upgraded Tektronix (TEK ) to buy from neutral, after the company on Friday posted second quarter results.

Tektronix said it had 31 cents second quarter earnings per share from operations (excluding items), and forecast 30 cents to 34 cents third quarter EPS.

Analyst Mark Fitzgerald said that the company has a full new product pipelines that should begin contributing to revenues more meaningfully by spring, at the same time business conditions for communications capital spending are improving. Fitzgerald notes that good financial controls are reflected in the company's margins, free cash flow, and share buyback, while its options expense has a relatively small impact on EPS. He raises his 85 cents fiscal year 2006 (ending May) EPS estimate to $1.08, his $1.06 fiscal year 2007 estimate to $1.81 from 1.06, and his $23 price target to $31.50.

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