Siebel Systems (SEBL

) says it sees stronger-than-expected third-quarter revenue. Adams Harkness upgraded the stock to buy.

Analyst John Torrey says the company sees $315 million to $317 million third-quarter total revenue, up from the $306 million consensus estimate and his $311 million estimate. He believes recent negative sentiment on Siebel is overdone. He thinks the company's core customer relationship management (CRM) business will benefit from buyers' re-emergence, while the company launches into significant growth categories in applications software (e.g. mid-market, incentive compensation).

Torrey says his channel checks indicate deal flow for Siebel, and in CRM overall, is relatively steady in the third quarter. He sees earnings per share of 4 cents in the third quarter, 17 cents for 2004, and 18 cents for 2005. He set an $11 yearend 2004 price target on the stock.