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EMC A Buy 'Purely' From Arbitrage Perspective, Says Mizuho Tech Analyst

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Mizuho Securities on Wednesday issued a note on EMC Corporation (NYSE: EMC) after analysts noted a potential arbitrage opportunity. The firm upgraded EMC from Neutral to Buy and lowered its price target from $30 to $28.50.

Analyst Abhey Lamba wrote, "We are upgrading EMC... purely from a transaction arbitrage perspective. We reiterate that there are no fundamental reasons to get involved. However, the spread between the current price and transaction terms has likely created an opportunity for special situation investors. The deal seems to be progressing well and is likely to close later this year, which would result in narrowing of the spread."

From a valuation perspective, analysts noted that the current price of EMC is at a significant discount, which could represent a buying opportunity. Furthermore, the Dell-EMC merger looks to be on track for completion, with company management expressing confidence that the merger will overcome regulatory hurdles and close on schedule.

Analysts also highlighted EMC's recent earnings announcement, where the company reported revenue of $7.01 billion, slightly below estimates and EPS of $0.65, which was in line with expectations. Going forward, no guidance was given for the company's financial performance due to the pending merger with Dell.

Shares of EMC Corporation recently traded at $24.20, up 1.2 percent.

Latest Ratings for EMC

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

View More Analyst Ratings for EMC
View the Latest Analyst Ratings

 

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Posted-In: Abhey Lamba mizuhoAnalyst Color Upgrades Price Target Analyst Ratings

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