Shares of Irvine-based Epicor Software Corp. closed higher Thursday after an analyst upgraded the stock on expectations for the fourth quarter, hopes for a new product and a possible battle over the company’s board.
Epicor’s shares ended up 6% on a market value of $300 million. The stock is off about 60% in the past year.
“We see several potential near-term catalysts,” wrote analyst Steve Koenig of KeyBank Capital Markets, part of Cleveland-based KeyCorp.
Koenig raised his rating on Epicor to “buy” from “hold.”
The analyst upped his rating based on Epicor’s possible purchase of outstanding debt that converts to stock and on prospects for the company’s business.
The analyst said he expects “reasonably good” fourth-quarter results from Epicor. The company’s results are due in coming weeks.
On average, analysts expect Epicor to see quarterly sales of $131 million, up 10% from a year earlier.
Profits are seen coming at $13 million, down 18% from a year earlier on higher costs from a major product rollout.
Epicor makes what’s known as enterprise resource planning software, which helps midsize companies manage accounting, customer contacts, inventory, sales and other tasks.
The latest version of the company’s product is Epicor 9, which came out in December.
Epicor 9 could boost the company’s results in the second half of the year, Koenig said.
The analyst also cited the prospect of a proxy battle, which could push up the value of Epicor’s shares.
In the fall, Epicor fought off a takeover bid by New York hedge fund Elliott Associates LP, which tried to buy Epicor in a deal that valued the company at about $450 million.
While Elliott dropped its bid in November, the firm could seek to run director candidates for Epicor’s board.
Koenig cautioned that Epicor still faces issues, including a tough market selling software to corporations that could make the company’s projections for 2009 “overly optimistic.”
