Nomura Securities Downgrades VMware (VMW) to Neutral; Analyst Sherlund Cites Slowing Momentum

Nomura Securities downgraded VMware (NYSE: VMW) from Buy to Neutral with a price target of $95.00 (from $120.00) on slowing momentum.

Analyst Rick Sherlund commented, "A bit above the Street for Q3 revenues and EPS, but billings growth disappoints and softer guidance for billing and CFO for Q4. Guidance to come in January for 2015 will likely be below the Street as well, we suspect, making it hard for the stock to perform as billings momentum slows. Issues are tougher macro and difficulties signing big deals but also core vSphere is still well over half the business but is mature, so growth has to come from the vCloud Suite, which needs to drive essentially all the growth as other newer products are just too small still to matter."

The firm bumped FY 2014 EPS from $3.51 to $3.54 and cut FY 2015 EPS from $4.17 to $4.00.

For an analyst ratings summary and ratings history on VMware click here. For more ratings news on VMware click here.

Shares of VMware closed at $88.19 yesterday.

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