Jefferies upgrades iVillage (IVIL

) to buy from hold.

Analyst Youssef Squali says a pullback in stock price, and strength in core business make iVillage highly attractive at current levels, in his view. He notes the stock pulled back 21% since his initiation of coverage, and 13% since the company posted third-quarter results.

He views the pullback as an overreaction to the loss of Wal-Mart as a custom publishing customer. Squali believes the company's core business remains strong. He says the fourth quarter should display typical seasonal strength, with traffic metrics for month of October already showing an increase of 15%.

He maintains his 4 cents 2004 earnings per share and 15 cents 2005 earnings-per-share estimates. He has a $6.50 12-month target.