UPDATE: FBN Securities Upgrades VMware Ahead of New Product Launches
In a report published Thursday, FBN Securities analyst Shebly Seyrafi upgraded the rating on VMware (NYSE: VMW) from Sector Perform to Outperform, and raised the price target from $90.00 to $100.00.
In the report, FBN Securities noted, “We are upgrading shares of VMW from Sector Perform to Outperform and raise our PT from $90 to $100. We think that new products (vCloud Suite 5.5 and vSOM 5.5) which became generally available on Sept. 23, along with better contribution from ELAs, could help drive upside in FQ4. Moreover, although investors may be concerned about VMW's European and Federal segments post Red Hat's (RHAT) report on Sept. 23 (wherein RHAT noted challenges in these segments), we think that VMW's revenue from Europe will benefit from a rising Euro in FQ4 (now $1.358 vs. as low as $1.28 in early July) and from macro data showing that the region is still expanding (note that the Eurozone PMI in September was 51.1, down only slightly from the 26-month high of 51.4 in August). Please note that in FQ2, VMW's ex-GoPivotal/dispositions bookings growth in EMEA was healthy at a mid-teens %, while it had even stronger bookings growth in Asia (>40%) and in the Americas (~20%). Our analysis of ex-GoPivotal/dispositions revenue and billings growth concludes that VMW's outlook in FH2 remains bright.”
VMware closed on Wednesday at $82.44.
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