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JPMorgan: We Like EMC-Virtustream, Expect 'Spending Pause' After Charter-Time Warner Cable

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In a report published Wednesday, JPMorgan analysts maintained a Neutral rating on EMC Corporation (NYSE: EMC).

EMC announced its plans to acquire Virtustream, an enterprise grade IAAS provider, for $1.2bn in an all-cash deal. The acquisition is expected to close in Q315. The acquisition is unlikely to have any material impact this year, and is expected to be accretive to revenue and EPS in 2016.

"We generally like the deal as it provides EMC with Cloud provisioning software which can be sold to corporates deploying private cloud infrastructure. This same software should also provide a seamless bridge to public cloud workload deployment for internal users," the analysts wrote.

Charter Communications, Inc. (NASDAQ: CHTR) is set to acquire Time Warner Cable Inc (NYSE: TWC) in a deal that values the latter at $195 per share. "Any merger like this typically creates a spending pause as the two companies re-plan networks post merger," the analysts said, while adding that the pause in this case "is likely to be smaller than" that in the deal between Comcast Corporation (NASDAQ: CMCSA) and Time Warner Cable, in view of the "relatively small size."

The price target for Charter Communications has been raised from $194 to $198.

Latest Ratings for EMC

DateFirmActionFromTo
Sep 2016Brean CapitalTerminatesBuy
Aug 2016Deutsche BankMaintainsHold
Jul 2016BernsteinDowngradesOutperformMarket Perform

View More Analyst Ratings for EMC
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Posted-In: JPMorganAnalyst Color Price Target Reiteration Analyst Ratings

 

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