UPDATE: BMO Capital Markets Reiterates Market Perform Rating, Raises PT on VMware
In a report published Wednesday, BMO Capital Markets reiterated its Market Perform rating on VMware (NYSE: VMW), and slightly raised its price target from $99.00 to $100.00.
BMO Capital Markets noted, “Given the macro backdrop, including negative server data, VMW's better-than-expected results and outlook should provide some relief to the stock. Although still early, we note VMW is one of the few companies that has reported earnings and met, not lowered, its outlook. However, our views on the quarter's results and outlook are mixed. Bookings increased only 13% y/y, compared with almost 30% y/y growth in the past two quarters. FCF declined by 19% y/y, compared with 28% y/y growth in the March quarter and 1% y/y growth in the June quarter. VMW tightened its 2012 license growth expectations to 12.8% to 13.8% y/y, which implies 19.5% to 23% q/q growth for the December quarter, compared with 15.8% q/q growth in the December 2011 quarter. We project license growth of 19.1% for the December quarter.”
VMware closed on Tuesday at $83.72.
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