Stifel Nicolaus Initiates SAVVIS At Buy (SVVS)

Stifel Nicolaus is initiating coverage on SAVVIS Inc. (NASDAQ: SVVS) with a Buy rating and a $45 price target on shares.

In a note to clients, Stifel Nicolaus writes, "We are initiating coverage of Savvis with a Buy rating and a target price of $45 based on an EV/EBITDA multiple of 9x applied to our 2012 EPS estimate. We are establishing 2011 revenue and EBITDA estimates of $1.062 billion and $290 million. We are establishing 2012 revenue and EBITDA estimates of $1.179 billion and $345 million."

Stifel Nicolaus goes on to say, "Overall, we believe that the fundamental story should continue to improve. We see upside potential to estimates and the potential for an additional upward re-rating of the stock's multiple. Consolidation activity has also clearly picked up in the managed hosting/cloud sector, and we believe that Savvis could be viewed as an attractive target by a large telecom or technology company."

Shares of SVVS are up 84 cents today to $36.74, a gain of 2.3%.