UPDATE: Morgan Keegan Reiterates Outperform, Raises PT to $75 on The Ultimate Software Group
Morgan Keegan maintains its Outperform rating on The Ultimate Software Group, Inc. (NASDAQ: ULTI) and increases its price target to $75 from $65 due to improving labor markets and SFSF acquisition.
Morgan Keegan says, “Improving labor market trends (Unemployment rate down to 8.6% in November) suggest ULTI's business could begin to feel a tailwind versus the headwind experienced over the last few years, which gives us even more confidence in our 2012 revenue growth estimate. … SAP's proposed 8.1x EV/forward sales multiple for SFSF increases the multiple we believe larger vendors could be willing to pay for market-leading subscription software vendors; we believe ULTI is the only on-demand payroll software provider that could be attractive to Oracle or SAP if either chooses to compete more evenly against Workday (private).”
ULTI closed at $64.65 per share on Friday.
