UPDATE: BofA Merrill Lynch Upgrades Emulex Corporation to Buy from Underperform, Raises PO to $8.50 from $5.75

In a report published Thursday, Bank of America Merrill Lynch analyst Scott Craig upgraded Emulex Corporation

to Buy from Underperform, Raising its price object to $8.50 from $5.75. According to the report, the upgrade follows the Nov. 11, 2013 announcement of a sizable share repurchase program ($200mn vs. current $570mn market cap.) and restructuring ($30mn in annual cost savings; 13% of opex) which analysts believe investors/street are not giving appropriate credit for. “On 11/11/13, ELX increased its restructuring savings target to $30mn (annual) from $10mn, as management looks to streamline its product portfolio and improve its cost structure,” the report noted. “We believe the full $30mn is achievable, which are not yet reflected in Street estimates. As a result, we expect to see positive Street EPS revisions for F2015 over the next 6+ months – we model $0.82 vs. Street $0.77.” ELX closed Wednesday at $7.26 with shares trading down at 2.54 percent.