In a report published on Tuesday, Sterne Agee analyst Alex Kurtz initiated coverage on Cray CRAY with a Buy rating and a price target of $25.00.
In the report, Sterne Agee noted, "We believe Cray is well positioned to grow top line and deliver improving leverage over the next several years, driven by share gains within the high-end Supercomputer market, new product segments led by strong internal IP platforms and overall expansion in High Performance Computer (HPC) server market in part led by growth in the Intelligence communities (increasingly reliant on Supercomputers to combat global terrorism and Cybercrimes ($11B HPC market, IDC)). We expect improving leverage into CY2014 as investments in Storage and Graph Search (Big Data) begin to flatten out. Finally, ongoing reports indicate that IBM is considering a sale of its Server business to Lenovo, which if it goes through, could dramatically change the competitive landscape. IBM represents 32% of the market (IDC), primarily in the high end with Cray as its core competitor."
Cray closed on Monday at $17.05.
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