UPDATE: JG Capital Upgrades VMware on Positive 2Q13 Results

In a report published Thursday, JG Capital analyst Jeff Gaggin upgraded VMware VMW to a rating of Overweight, and a price target of $93.

In the report, JG Capital observed, “VMW reported solid results and guidance. License revs were $530M, up 3% y/y (up 5% y/y excluding Pivotal and other divestitures), above our estimate of $522M and the midpoint of consensus, which was $525M. On June 25th, 2013 at $65, we upgraded VMW to a Neutral, believing most of the bad news was reflected in the stock and today we are upgrading VMW to Overweight largely based on improving growth in 2H and valuation. While we are still concerned about VMW’s market saturation in their core server virt business and competition from Microsoft (MSFT; N/R), the 2H should improve relative to the 1H, reflecting newer mgmt/automation products (vSOM and vCloud Suite), ELA renewals, improved U.S. Federal spending and storage virt shipping in Q3/Q4.”

VMware closed on Wednesday at $71.11.