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UPDATE: Collins Stewart Raises Target to $50 on Rackspace Hosting

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Collins Stewart maintains its Neutral rating on Rackspace Hosting (NASDAQ: RAX) as it believes the company's solid quarter and outlook are largely priced in. It raises the price target on shares to $50, however, as it rolls estimates over to 2013.

Collins Stewart says, "With strong secular drivers of demand and a tight control of its cost structure, we believe Rackspace is capable of maintaining its highly capital efficient business model in current form for some time, despite the increasing competitive headwinds for its core product offering. Despite the rapidly increasing number of alternatives, we do not expect results to be pressured in 2012."

RAX closed at $49.23 a share on Monday.

 

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