Jefferies revisits software stocks on macroeconomic concerns

Upland Software

08/10/2019 19:39

** Jefferies says it remains positive on the software
industry, adjusts some stock ratings 'to be more defensive in
light of valuation and macroeconomic concerns'
    ** Says favors large-cap names with a balance of good growth
and valuation such as Microsoft  MSFT.O , Adobe  ADBE.O ,
Salesforce.com CRM, Intuit  INTU.O    urn:newsml:reuters.com:*:nL3N26T311
    ** Brokerage begins coverage of at least 5 companies with a
"buy" rating, including, Dropbox  DBX.O , Salesforce  CRM.N ,
and Splunk  SPLK.O 
    ** Also cuts PT of at least 8 other companies, including
Crowdstrike  CRWD.O , VMWare  VMW.N  and Workday  WDAY.O 
    ** Downgrades Carbonite  CARB.O  and Check Point Software
Technologies  CHKP.O  to "hold" from "buy" 
    ** Believes high multiples such as valuation associated with
recent software IPOs such as Zoom  ZM.O , Slack Technologies
 WORK.O , and CRWD to be unsustainable
    ** Shares of CARB, CRWD, WDAY and SPLK fall between 3% and
5%
  
  INITIATIONS:      
   Company       Rating        PT     Median PT
  Commvault       Buy         $59       $53.50
   Dropbox        Buy         $32        $32
 Salesforce       Buy         $171     $186.50
 Smartsheet       Buy         $52        $54
   Splunk         Buy         $157       $150
   Upland         Buy         $61        $56
  Software                            
  
  RATINGS AND PT REVISIONS:
   Company       Rating        PT     Previous PT  Median PT
  Carbonite       Hold        $17         $29         $25
 Check Point      Hold        $115       $140         $120
  Software                                         
   Citrix     Underperform    $80         $85         $106
 Crowdstrike      Hold        $67         $80         $90
  Dynatrace       Hold        $21         $23         $29
 Solar Winds      Buy         $22         $23         $22
   VMWare         Buy         $180       $198         $180
   Workday        Hold        $188       $194         $223
   Varonis        Buy         $92         $88         $80
 
    

 (Reporting by Ambhini Aishwarya in Bengaluru)
 ((Ambhini.Aishwarya@thomsonreuters.com; within U.S.+1 646 223
8780; outside U.S. +91 80 6749 0543;))