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VMware Downgraded En Masse By Street; Stock Tanks

VMware Downgraded En Masse By Street; Stock Tanks
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Shares of VMware, Inc. (NYSE: VMW) tanked more than 15 percent Wednesday morning. The company reported a Q3 earnings and revenue beat on Tuesday evening, but that didn't stop Wall Street firms from downgrading the stock: Nine firms downgraded VMware Wednesday morning.

Shares traded recently at $57.94, down 15.7 percent or $10.84 per share.

Bank of America Merrill Lynch cited weak revenue guidance, as well as "newly-formed EMC JV Cloud business Virtustream, suggesting that core VMW growth rate is 2-3% lower." BofA pointed to one of its recent notes referring to dilution from the Dell deal and weak Q3 bookings -- the JV dilution now makes this a "triple whammy" for the stock, for which BofA was "unprepared."

Sterne Agee CRT noted "unclear organic growth rates" in its downgrade. The firm sees "see too many near-term hurdles to expect the stock to trade to the higher end of historical Forward FCF multiple ranges (15-21x)."

Raft Of Downgrades

Here is a recap of the Street:

  • Bank of America: From Buy to Neutral, Price Target cut form $106 to $69
  • Sterne Agee CRT: From Buy to Neutral, PT cut from $88 to $75
  • Pacific Crest: From Overweight to Sector Weight
  • Raymond James: From outperform to Market Perform
  • Nomura: From Buy to Neutral
  • Susquehanna: From Positive to Neutral
  • Maxim: From Buy to Hold
  • Atlantic Equities: From Overweight to Neutral
  • Macquarie: From Undefined to Neutral

Latest Ratings for VMW

Sep 2016BarclaysInitiates Coverage onEqual-Weight
Sep 2016RBC CapitalAssumesOutperform
Sep 2016JefferiesMaintainsBuy

View More Analyst Ratings for VMW
View the Latest Analyst Ratings

Posted-In: Bank of AmericaAnalyst Color Short Ideas Downgrades Price Target Analyst Ratings Movers Trading Ideas Best of Benzinga


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