Raymond James upgraded Micromuse (MUSE

) to strong buy from outperform.

Analyst Mike Latimore says he's encouraged about Micromuse's prospects after recent channel checks. He says an increased focus by wireline operators on broadband deployments, Internet Protocol services, backbone implementations, and managed services launches are creating demand for Micromuse's software. He thinks numerous government projects, particularly tied to the military, are offering more opportunities.

Latimore notes that Cisco, a key distribution partner for Micromuse, commented that trends look good for the near term in the enterprise and service provider sectors, which should bode well for Micromuse. He sees 8 cents fiscal 2003 (Sept.) earnings per share, 20 cents earnings per share in fiscal 2004, and 38 cents earnings per share in fiscal 2005.