Benchmark Raises Savvis Price Target To $45
In a report published by Benchmark, Savvis' (NASDAQ: SVVS) price ratget is to be raised to $45 on operating momentum and industry trends.
Benchmark said that it met with Savvis management earlier this week and remain convinced Savvis' stock represents a compelling investment. “We raise our price target from $40 to $45 per share and reiterate our Buy rating. Savvis is exiting an operational transition period at the same time as enterprise adoption of outsourced IT is accelerating. Savvis had multiple years of subpar performance as wholesale Internet customers churned. The percent of colo revenue from this segment was once 50%. Elevated churn ended as 2009 concluded. With exposure to this wholesale segment of colocation down to about 5%, Savvis' performance improved every quarter in 2010. Organic growth is accelerating from 2% in 2009 to our forecasted 11% this year while churn has dropped to 1.5% per quarter.”
Savvis closed yesterday at $35.08.
