UPDATE: BMO Capital Markets Lowers PT on VMware on In-Line March Q Revenues
In a report published Wednesday, BMO Capital Markets analyst Keith Bachman reiterated a Market Perform rating on VMware (NYSE: VMW), but lowered the price target from $85.00 to $75.00.
In the report, Bachman noted, “VMW reported in-line March Q revenues, but guidance for June Q was below our/consensus estimates. Despite the lower guide for the June Q, management maintained its revenue outlook for 2013, which we believe puts more pressure on the 2H13, particularly the September Q. Consistent with our past comments, we believe the September Q could have downside risk, as revenue growth has averaged 1.6% q/q over the past two September Qs, driven by a decline in license revenues of ~5% q/q. We assume license revenues to be flat q/q in the September Q, and project annual license revenue growth of ~4% y/y in 2013, which is well below management's outlook of 6%-9% y/y growth.”
VMware closed on Tuesday at $75.70.
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