Raymond James Ups Blue Coat Systems to Strong Buy

The company's stock price cheapened recently following its quarterly results

Raymond James upgraded Blue Coat Systems (BCSI ) to strong buy from outperform, after the company's stock price cheapened recently amid its second quarter financial results and third quarter guidance.

Analyst Jonathan Ruykhaver says the company's shares are trading at about 24 times $1.68 calendar year 2006 earnings per share estimates, essentially in-line with the peer group average. Meanwhile, the analyst believes the company has stronger relative growth opportunity vs. peers. He believes the stock can outperform from current levels as investors fully realize that the near term slowdown in growth does not represent any fundamental change in the company's growth opportunity. He has a $50 price target on the stock.

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