Stifel Nicolaus Reiterates Buy on Rackspace Hosting

Stifel Nicolaus is out with its report today on Rackspace Hosting

, reiterating Buy. In a note to clients, Stifel Nicolaus writes, "We reiterate our Buy rating on shares of Rackspace and our target price remains $50 based on 15x our 2012 EBITDA estimate. Last week we spent time with Rackspace in a series of investor meetings. Overall, we walked away from the meetings feeling confident that the fundamental growth outlook remains strong. Following strong 1Q11 results, we are confident in the company's ability to generate faster revenue growth in 2011 vs. 2010 with flat EBITDA margins and we see upside potential to 2011 and 2012 consensus estimates." At the time of posting, shares of RAX were trading at $42.61, down 0.26% from Thursday's close.