Piper Jaffray Reiterates Neutral on VMware Following Muted Q3 Results
In a report published Thursday, Piper Jaffray analyst Mark R. Murphy reiterated a Neutral rating and $87.00 price target on VMware (NYSE: VMW).
In the report, Piper Jaffray noted, “VMware competitor Citrix announced preliminary Q3 results, guiding revenue and earnings below expectations. As a reminder, our recent work has shown that VMware's View product is rapidly gaining share and would likely cause problems for Citrix. Our last few VMW notes (including July 23 and September 4) highlighted industry feedback indicating VMware is much more competitive with Citrix and likely taking share. VMware resellers had noted Citrix customers approaching them ‘more and more', stated that traction in VMware's desktop virtualization solution (View) is ‘exploding' and that VMware has closed a significant portion of the competitive gap between View and the Citrix desktop virtualization offering. We think VMW's inroads have caught up to Citrix and contributed to the negative preannouncement, and VMW's progress should be appreciated by investors, but believe VMW is fairly valued for now at a low 20s EPS multiple. Neutral, $87 PT.”
VMware closed on Wednesday at $78.93.
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