Shares of TechnologyOne Ltd (ASX: TNE) surged 5.04% in intraday trading, following a bullish upgrade from Bell Potter. The Australian enterprise software provider's stock received a boost after the broker raised its recommendation from hold to buy, citing an attractive valuation after a recent 25% decline over the past two months.

Bell Potter analyst Chris Savage set a new price target of A$29.00 for TechnologyOne, implying an 18% upside potential. The upgrade comes ahead of the company's anticipated first-half results announcement next month, which Savage believes could act as a catalyst for the share price. The analyst expects a strong performance, including a 19% increase in pre-tax profit and annual recurring revenue (ARR) exceeding the company's A$500 million target.

Investors appear to be responding positively to the broker's optimistic outlook for TechnologyOne's upcoming financial results. Savage anticipates the company will provide robust guidance for the full year, projecting profit growth in the range of 14-18%. This forecast, coupled with TechnologyOne's history of exceeding its own outlook, has likely contributed to the renewed investor confidence reflected in today's share price surge.