Tuesday, September 30, 2008

VMware's share plunge 15% on a downgrade by RBC Capital


Market conditions are harsh and we are all low on cash, or atleast want to hold on to our wallets. VMware has been immune to in back in 2007, but this is too hard to withstand for any firm.

RBC Capital this morning got religion on the slowdown in IT spending, cutting ratings on four stocks and slashing estimates and price targets on a host of others. The multiple moves boil down to this statement, which is repeated in most of the individual reports this morning: “We are taking a more conservative stance across our coverage universe to reflect a degrading environment for global IT spending.”

The downgrades:

* VMware (VMW): To Sector Perform from Outperform. Target to $29 from $50.
* Xyratex (XRTX): To Sector Perform from Outperform. Target to $13 from $23.
* Voltaire (VOLT): To Sector Perform from Outperform. Target to $5 from $8.
* QLogic (QLGC): To Sector Perform from Outperform. Target to $17 from $18


Barrons

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