BMO Capital Reiterates Outperform on EMC Corporation on Back of Possible Merger with Dell

BMO Capital analyst Keith Bachman came out today with a few thoughts on EMC Corporation (NYSE:EMC), following the news that Dell could make an offer to combine with EMC. The analyst reiterated an Outperform rating on EMC stock, with a price target of $29, which represents a potential upside of 6% from where the stock is currently trading.

Bachman wrote, “We think more of the same in terms of EMC’s strategy will likely confine EMC’s stock to continued relative underperformance, as has been the case for the last five years. Therefore, our initial reaction is biased to the positive, since it is a change. Our more specific answer depends on the structure and valuation of any potential deal.”

“Nevertheless, as we have consistently said, we believe that EMC’s individual business units are worth more than the current aggregate valuation. If we include the current value of NTAP (for EMC’s storage business) and VMW, we believe the sum of the parts valuation is between $30 and $32, with core EMC worth between $14 and $15 per share, based on 11x our CY2016 EPS estimate for EMC core (about 10x EV/FCF).”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Keith Bachman has a total average return of 20.2% and a 63.4% success rate. Bachman has a 2.8% average return when recommending EMC, and is ranked #42 out of 3772 analysts.

Out of the 27 analysts polled by TipRanks, 19 rate EMC Corporation stock a Buy, while 8 rate the stock a Hold. With a return potential of 9.2%, the stock’s consensus target price stands at $29.90.

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