UPDATE: ISI Group Upgrades VMware to Strong Buy on Raised CY13 Estimates

In a report published Wednesday, ISI Group analyst Brian Marshall upgraded the rating on VMware

from Buy to Strong Buy, and lowered the price target from $130.00 to $115.00. In the report, Marshall noted, “In our view, the divergence gap between negative investor perception vs. reality on VMW has become too great to ignore. Accordingly, we are upgrading shares of VMW to a STRONG BUY (from BUY), raising our CY13 estimates and see ~50% upside to our $115 PT (or ~35x CY13 EPS). Investor concerns are overblown with respect to current server virtualization penetration (i.e., over 50%) and fail to recognize the significance of the ‘up-sell' opportunity of vCloud Suite (i.e., bundled mgmt/automation tools), in our view.” VMware closed on Tuesday at $76.09.