VMware (VMW): VMWare Has Further Upside - Drexel Hamilton
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Drexel Hamilton analyst, Brian White, reiterated his Buy rating on VMware (NYSE: VMW) noting that VMware is hosting VMworld and the company made a host of announcements that enhance its position in the cloud. On a related note, Dell and EMC announced last night that the combined company (i.e., to be named Dell Technologies) is expected to close on September 7.
The analyst stated that "after nearly eleven months of overhang on VMware from the pending Dell/EMC deal, we are pleased to see this transaction nearing completion. Moreover, VMware has started to deliver healthy quarterly reports with progress around its portfolio transition and an attractive valuation at less than 13x our CY:17 EPS projection (ex-cash)."
The analyst went on to say "After the Dell/EMC deal was announced on October 12 of 2015, VMware's stock was punished immediately and continued to fall sharply until bottoming out earlier this year after a 45% decline. Although VMware has delivered a couple of healthy quarters in a row with strong growth in newer areas that are part of the company's portfolio transition, and the stock has rebounded from the lowest level in approximately six years, VMware is still down nearly 6% since the Dell/EMC deal was announced last October. With more progress in its portfolio transition and new innovations in the cloud, we believe VMware has further upside potential from current levels."
No change to the price target of $85.00.
Shares of VMware closed at $74.22 yesterday.
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