Collins Stewart Reiterates Buy, $108 on VMware

Collins Stewart maintains its Buy rating and $108 price target on VMware (NYSE: VMW) as it expects good results from the company following 4Q preview.

Collins Stewart says, "We believe the company closed another strong quarter and with the shares trading down recently, in-line with the software group, we find them attractive. Management already gave 1Q12 guidance last quarter ($1.00B-$1.03B), down slightly q/q vs. 4Q guide of ($1.03B-$1.06B) which we expect them to re-endorse, and as is typical will initiate current year (2012) guidance with a cautious bent. Keep in mind that a year ago, 2011 license rev guidance started at 14%-19% growth, but with three quarters reported is now running at 30%. Thus, even with initial caution we would expect 2012 guidance to move higher as the year progresses."

VMW closed at $88.12 a share on Friday.