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In a report published Friday, analyst AM Sacconaghi, Jr, of Bernstein, upgraded
EMC CorporationEMC to Outperform, with a price target of $32.
EMC's stock has been underperforming for the last three years and investor sentiment has been low. Currently the stock is trading at historic lows. However, Sacconaghi believes that there could be several value creation drivers for the company, such as an accretive acquisition or a large buyback.
"VMWare spin-off or buy in, and op ex reductions – our analysis suggests any of these individually could potentially boost EPS by >10 percent," the analyst said.
Bernstein also believes that the company's risk-reward profile is favorable at present. Investing in this stock offers the opportunity to practice a call option in the event that IT spending improves and EMC witnesses a turnaround.
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