Analyst upgrades Elizabeth Arden to 'Outperform'

The stock rose 67 cents, or 4.4 percent, to $15.79 in morning trading.

Oppenheimer & Co. analyst Joseph Altobello upgraded the stock to "Outperform" from "Perform" and said the stock's value doesn't reflect gains from a licensing agreement or restructuring. Shares have declined sharply since the company posted disappointing fiscal third-quarter results, Altobello said.

In May, Elizabeth Arden and apparel and fragrance maker Liz Claiborne agreed to a global licensing agreement to make and distribute Liz Claiborne fragrance brands.

Altobello said the combination of this licensing agreement and savings from a restructuring may add more than 70 cents per share to earnings in fiscal 2008. Analysts polled by Thomson Financial expect $1.31 per share for fiscal 2008.

Meanwhile, Altobello said sales should improve in coming quarters, partly because nearly 40 percent of sales come from outside the U.S.

"Although we expect general macroeconomic pressures ... we do believe there is some cause for optimism that top-line trends should improve in the coming quarters," Altobello wrote in a client note.

Altobello's $25 price target leaves room for 65.3 percent upside to Monday's $15.12 closing price.