UPDATE 1-RESEARCH ALERT-Wedbush ups Digital River to outperform
* Price target raised by $8 to $36
* Raises to outperform from neutral
* Shares rise as much as 6 pct
Sept 3 (Reuters) - Digital River Inc's (DRIV.O) recent extension of an agreement with Microsoft Corp (MSFT.O), along with another deal, should make up for the loss of its largest customer Symantec Corp (SYMC.O), Wedbush Securities said and upgraded the stock to "outperform."
On Wednesday, the e-commerce services provider said Microsoft had decided to outsource its domestic e-commerce store to the company.
"Expanded e-commerce offering and contract extension with Microsoft should assuage fears of Digital River's largest customer taking its e-commerce platform in-house," analyst Kerry Rice said in a note to clients.
In October, Digital River warned of Symantec (SYMC.O) not extending a contract, set to expire on June 30, as the security software maker moved all the online traffic outsourced to Digital River to an internally developed e-commerce system. [ID:nBNG159286]
The analyst said the two deals would make up for most of the $110 million revenue void left by Symantec.
Rice expects the deals to contribute revenue of about $75 million in 2011 and boost operating margins by 20 percent.
Shares of the Eden Prairie, Minnesota-based company, which rose as much as 6 percent, were almost flat at $29.94 Friday noon on Nasdaq. (Reporting by Swati Chitnis in Bangalore; Editing by Don Sebastian)