UPDATE: Raymond James Downgrades EMC (EMC) to Outperform
Get Alerts EMC Hot Sheet
Rating Summary:
14 Buy, 25 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
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Raymond James downgraded EMC (NYSE: EMC) from Strong Buy to Outperform with a price target of $29 (unchanged). Analyst Brian G. Alexander pointed out that shares are within 11% of his price target. Overall, he expects its deal with Dell to close as planned.
"Recall Dell’s offer for EMC shares is $24.05 plus the value of the VMW tracking stub at ~$5.40 (based on VMW share price of $51 and 0.111 shares of VMW). We include a 5% discount to account for the lack of voting rights for VMW tracking shares. We believe that the biggest risk to the deal remains debt financing but note that Dell has sold key assets to improve liquidity. Dell recently announced the sale of its Perot Systems services division to Japan’s NTT Data Corp for $3 billion. A special shareholder vote is expected this spring to approve the merger," said Alexander.
"EMC and Dell have been working on integration since November, and business unit heads for the combined entity have already been named. We note that EMC already has merger approval from the US Federal Trade Commission and the EU and is expected to have a special shareholder vote this spring. We also remind investors that both companies face significant break-up fees ($4 billion for Dell and $2.5 billion for EMC) if either walks away from the transaction," added the analyst.
For an analyst ratings summary and ratings history on EMC click here. For more ratings news on EMC click here.
Shares of EMC closed at $26.41 yesterday.
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