J.P. Morgan Reiterates Neutral Rating on Blackboard (BBBB)

J.P. Morgan is out with a research report this morning, where it reiterates its Neutral rating on Blackboard BBBB; it has a $47.00 price target on the stock. The J.P. Morgan analysts cited a recent meeting with company management, where the found out that the company continues to expect 10-15% growth in 2011 and 2011, depending on how an economic recovery plays out. The analysts added that BBBB has done a very good job of developing and acquiring technology to keep them on the forefront of trends in technology for the education space. As for valuation, the analysts noted, “The annual subscription license model that Blackboard employs is a strong model for driving visibility into results and cash flow. That is why we believe the most relevant valuation metric for the company is an enterprise value to free cash flow to the firm (EV/FCFF) calculation. We are establishing a December 2011 price target of $47.00 (our prior Dec 2010 target was $47). This is based on the same 15X our revised 2011E EV/FCFF, which is in line with our other subscription oriented software names.”