Raymond James upgrades service assurance software company Micromuse Inc. (MUSE

) to strong buy from market perform.

Analyst Mike Latimore says he believes Micromuse is a leader in high-scale service assurance software and the company's end-markets are improving.

He believes Micromuse's visibility will accordingly increase and permit it to expand operating margins given its highly leverageable model. Furthermore, he notes recent acquisition multiples and peer group multiples suggest at least a 35% upside in stock.

Latimore raises his 23 cents fiscal 2006 (ending September) earnings per share estimate to 25 cents and establishes a $7.25 target, 27 times his 27 cents calendar year 2006 earnings per share estimate.