Bear Stearns Upgrades WebMethods

Analyst John DeFucci sees increased momentum in integration software and improved stability in the integration software maker's salesforce

Bear Stearns upgrades WebMethods (WEBME ) to outperform from peer perform. Yesterday the company restated its results for fiscal 2004 through the first-quarter of fiscal 2005.

Analyst John DeFucci says that after an internal investigation and earnings per share restatement, issues appear minor and isolated to the Japan unit.

He says the company is positioned well to achieve consistent profitability. He sees increased momentum in integration software, improved stability in salesforce.

DeFucci notes strengthening SI channel, compelling product cycle, seasonal strength in fourth-quarter, and expense control. He says the company is an attractive takeover target.

He has an $8.75 target. He widens his 12 cents fiscal 2005 (ending March) loss estimate to a 13-cent loss and ups his 10 cents fiscal 2006 earnings per share estimate to 11 cents.

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