Goldman Sachs Raises VMware (VMW) Price Target To $70

Goldman Sachs analysts Derek R. Bingham, Sarah Friar and Gonzalo Cavenaghi raised their price target for shares of VMware Inc

to $70 per share, up from the previous price target of $64. The analysts said that that after attending an infrastructure software conference and speaking with VMware customers, they felt that the company continued to have strong pricing leverage because of the technology lead that it has over its competition. They also said that the use of VMware's management tools should increase as environments become more virtualized. The Goldman Sachs analysts wrote, "We increase our 12-month price target for VMware to $70.00 from $64.00 prior, as strong customer and partner feedback give us greater confidence in the company’s growth trajectory, leading to an increased target multiple. Our revised price target represents 25X our CY2010 FCF estimate of $1,100 million (based on enterprise value)." Shares of VMware (

) were down less than 1% at $71.40 shortly after the market opened.