UPDATE: Evercore Upgrades Rackspace

Rackspace Hosting, Inc. (NYSE: RAX) was upgraded by Evercore from Hold to Buy late Monday with a $42 price target.

According to Bloomberg, the Evercore analysts cited the company’s valuation and traction in its core business as reasons for the upgrade.

The traction has been the result of a greater emphasis on managed hosting and potential alliances with cloud providers.

Evercore expected Rackspace to gain investor interest if it delivers additional year-over-year revenue growth in 3Q.

Rackspace Hosting, Inc. closed Monday at $33.80, down 1.47 percent.