UPDATE: Jefferies Upgrades VMware to Buy, Raises PT on Revenue Acceleration Confidence

In a report published Friday, Jefferies analyst Ross MacMillan upgraded the rating on VMware VMW from Hold to Buy, and raised the price target from $86.00 to $105.00. In the report, Jefferies noted, “We upgrade VMware to Buy. We are increasingly confident of revenue acceleration, and our CY14 License growth forecast of +16% is above consensus at +11%. Near-term we think higher ASP suites (vCloud, vSOM, EUC) will drive ELA adoption against conservative assumptions. In CY14 and beyond we see new growth drivers emerging in hybrid cloud and software defined networking/ storage. Trading at 14X FCF relative to high-teens FCF growth, we think it should outperform.” VMware closed on Thursday at $85.46.