UPDATE: JP Morgan Initiates Coverage on Rackspace Hostings with Overweight Rating, $83 PT

In a report published Wednesday, JP Morgan & Co. initiated coverage on Rackspace Hosting RAX with an Overweight rating and $83.00 price target. JP Morgan noted, “The move to cloud computing is one of the few secular trends in technology seen in the tough macro environment we have experienced the last couple years. We expect this trend to continue and potentially accelerate once we see broader global economic expansion. Rackspace is one of only a few pure play stocks investors can use to invest in this trend, and we think that will help the stock maintain a premium valuation, allowing 20%+ growth in revenue/EBITDA to drive the stock. So we are initiating coverage on RAX with an Overweight rating and a December 2013 price target of $83.” Rackspace Hostings closed on Tuesday at $66.59.