Analyst upgrades Gartner on stabilization of corporate IT spending; shares flat in down market

Analyst upgrades Gartner; shares flat

NEW YORK — An analyst upgraded his rating on research and consulting company Gartner Inc., saying that corporate information technology spending appeared to be stabilizing with a rebound expected in 2010.

JPMorgan Securities analyst David Lewis raised his rating on the stock to “overweight” from “neutral” and increased a price target for December 2010 to $23, up from $17.

Lewis also noted that an 8 percent pullback in the shares last week presented a buying opportunity.

Shares rose 2 cents at $16.22 in afternoon trading Monday.

Gartner makes its money on IT-focused research, consulting and events.

“Historically, the IT research business tends to be late cycle due to the renewal of (mostly) one-year research subscription contracts,” Lewis said in a research note. “We believe industry changes and management initiatives could help accelerate a recovery.”

Among such changes were role-based products and a heightened focus on product usage, which has helped retain clients, he said.

Gartner has also seen an increase in new business from the first quarter to the second quarter, as clients are shifting their focus to growth initiatives after a quarter of cost-cutting, he said.