UBS Reiterates Buy and $83 Price Target on VMware (VMW)

September 9, 2016 10:34 AM EDT
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Price: $82.64 -0.06%

Rating Summary:
    23 Buy, 30 Hold, 4 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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UBS reiterated a Buy rating and $83.00 price target on VMware (NYSE: VMW) after spending time on the road with management.

Analyst Brent Thill "VMW is seeing an influx of positive catalysts that could help drive the stock higher - accelerating '16 billings growth, a building base of new products (NSX, vSAN, EUC) offsetting the legacy product slowdown, Dell/EMC acquisition now in the rear view mirror, cash flow could grow 40% in FY16E, and a $1.2Bn buyback with >$8.5Bn in cash + $2Bn in annual cash flow. This is a major contrast to the significant headwinds VMW has faced over the past year - material slowdown in overall license revenue and billings ('15 license rev. slowed to 5% from 14%, '15 billings slowed to 2% from 16%), a complete U-turn in their public cloud strategy (from build to partner), and the overhang of Dell/EMC and associated tracking stock which drove the stock down >50% from its $90+ high. We believe these headwinds are slowly turning into tailwinds and that ultimately VMW can have a secure position in the hybrid cloud, where the majority of larger enterprises will place their IT assets."

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 $74.34 yesterday.

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