UPDATE: Bank of America Raises PO to $68 on Rackspace Hosting on Comps Rally

Bank of America reiterated its Neutral rating on Rackspace Hosting

and raised its price objective from $58 to $68. Bank of America commented, "We are raising our PO to $68 from $58 based on our sum of the parts analysis mainly due to multiple expansions following the recent rally in comps, while maintaining our thesis and estimates. Our scenario analysis indicates +13% upside potential and –12% downside risk from current levels, and we would prefer a better tradeoff. RAX's transition of its cloud platform to OpenStack appears to be on track and provides better scale to attract larger contracts. However, there is increasing competition in the mid-market from the likes of Amazon and IBM which could make it tougher to win business." Rackspace Hosting closed at $64.24 on Thursday.