Banc of America Hikes Sun Micro Rating
Banc Of America Securities upgraded its investment recommendation on shares of Sun Microsystems (SUNW ) to buy from market perform, and set a $10 price target.
Analyst Joel Wagonfeld believes the stock's recent pullback provides an attractive entry point prior to resumed IT spending, which should provide top-line growth starting in the second half of 2002. The stock fell over 40% in the last 30 trading days. Wagonfeld says the current valuation reflects more realistic growth prospects. He has higher confidence in his 9% normalized revenue growth estimate. Wagonfeld sees Sun's recent decisions to introduce its family of low-end Lintel servers and to expand its line of Cobalt servers as a reflection of its increased willingness to adapt its model. He views this as positive for overall growth.