Market Update: EMC Corporation (NYSE:EMC) – VMware Has Upside Beyond the Tracking Stock, Says Gabelli

[at Barrons.com] – Gabelli & Co. analyst Hendi Susanto today writes that there are positive things in store for VMware (VMW) once it gets past the pending acquisition of EMC (EMC), its majority shareholder, by privately held Dell. EMC is expected to have a special shareholder meeting on July 19th to vote on the Dell proposal, and the deal is expected to close by October, according to EMC management, notes Susanto. By way of background, Dell is offering to pay EMC holders $24.05 in cash and 0.111of a share of a newly issued VMware tracking stock for every EMC share, notes Susanto. Read more on this. EMC Corporation (EMC) , with a current value of $54.12B, began trading this morning at $27.74. During the trading session, EMC traded between $27.68 to $27.84 with a trailing 52-week range being $22.66 to $28.77. EMC shares are currently priced at 15.48x this year’s forecasted earnings, which makes them relatively expensive compared to the industry’s 14.68x earnings multiple. And for income investors, the company pays shareholders $0.46 per share annually in dividends, yielding 1.64%. In a review of the consensus earnings estimate this quarter, 25 sell-side analysts are looking at $0.42 per share, which would be $0.01 worse than the year-ago quarter and a $0.00 sequential decrease. What we find to be interesting is that the full-year EPS estimate of $1.80 is a $0.02 worse when compared to the previous year’s annual results. The quarterly earnings estimate is predicated on a consensus revenue forecast of $6.00 Billion. If reported, that would be a 1.15% decrease over the year-ago quarter. In terms of ratings, Sterne Agee CRT downgraded EMC from Buy to Neutral (Jun 2, 2016). Previously, UBS downgraded EMC from Buy to Neutral. The average price target for EMC shares is $28.87, which is 4.07% above where the stock opened this morning. See more in (NYSE:EMC) Similar Articles: Market Update: EMC Corporation (NYSE:EMC) – VMware Surges 10%: Q2 View Beats, Sets $1.2B Buyback Stock Update: EMC Corporation (NYSE:EMC) – VMware Earnings Preview: Shareholders Uneasy Despite Expected Growth Company Update: EMC Corporation (NYSE:EMC) – VMware Backs out of VirtuStream; Good Move, Say Analysts; Gabelli Starts at Buy