Shares in DemandTec rise after analyst upgrade

Shares of price-management software company DemandTec Inc. rose Wednesday after an analyst upgraded the stock based on the likelihood it will beat Wall Street estimates in its next fiscal year.

Analyst Terry Tillman of Raymond James & Associates Inc. raised his rating on the shares to "Outperform" from "Market Perform." He noted that on average, analysts have dropped their prediction for revenue growth for fiscal 2010, which begins in March, to 13 percent.

"We believe an ongoing trend of conservative guidance and resulting upside performance could represent catalytic events for the stock and allow it to outperform, even if valuation trends for tech stocks remain under severe pressure," he wrote in a report to clients.

Shares rose 41 cents, or 5.2 percent, to $8.33, while the Dow Jones industrial average ended down nearly 3 percent.

Tillman also said he expected DemandTec software to do well with grocery stores, which he said "are likely to notably outperform broader retail."