Ahead of the Bell: Jefferies ups Novell to 'Buy'

Shares of Novell Inc. advanced in premarket electronic Friday trading after a Jefferies analyst upgraded the business software maker, saying it is well-insulated from the weaker economy.

Novell shares rose 17 cents, or 2.9 percent, to $6.09. The stock closed Thursday at $5.92.

Katherine Egbert raised Novell to "Buy" from "Hold" in a note to clients, saying Novell products have a significant presence in government and education, which are likely to continue generating revenue despite a weaker economy.

She called its revenue "as stable as you can get during a recession."

In addition, the Waltham, Mass., company's margins are improving and there is a possibility of a partnership with Microsoft Corp. surrounding a new application, Egbert said.

Egbert cut her earnings estimates on the company, predicting lower interest income. She assigned a price target of $7.50, implying she expects shares to rise 27 percent from its Thursday close.