Stifel Remains Sidelined on VMware (VMW) Ahead of 1Q Earnings Release

Stifel reiterates a Hold rating on VMware (NYSE: VMW) ahead of the company's 1Q earnings report. VMW is scheduled to report 1Q earnings on April 19th after market closes. Stifel believes that VMW is likely hit a subdued EPS and revenue forecast of $0.83/$1,556.8M, which is at the low end of guidance. The company's guidance of $0.83-$0.85 EPS, and $1,555M-$1,600M in revenue, was well below F1Q16 street estimates of $0.92 and $1,654.2M.

Analyst Brad Reback commented, "Overall, 2016 is shaping up to be a transition year, with growth in newer initiatives expected to offset declines in the mature vSphere business and while valuation is not expensive at 7.5x CY17 EV/FCF, we remain cautious given the aforementioned challenges (not to mention additional risks upon Dell/EMC closing including the potential for reduced VMware shareholder rights, supply/demand impact from the new tracking stock, etc.) and remain on the sidelines."

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 $51.73 yesterday.

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