UBS Upgrades Pure Storage To Buy, Calls Name A 'Pure Play Flash Vendor'

United Bank Of Switzerland's Steven Milunovich upgraded Pure Storage (NYSE: PSTG) from Neutral to Buy with a price target of $16.00. The UBS analyst praised the company's operating margin future outlook as the company's expenses reported under the analyst's estimates. "Pure's long-term goal is an operating margin of 15-20%, but today it is losing money in a land grab share." The analyst was confident that profit margins would increase to the 15-20% level eventually after costs of the land grab are fully incurred. Additionally, Pure Storage's FlashBlade, "which should be available by year end… could lead to upside revenue surprises" said Milunovich.The analyst was concerned, however, that Pure's competition was rising to a point that has not seen before in the industry. "The incumbent competition is not asleep, and Pure's long-term differentiation is unclear" stated the analyst.