SunTrust raises price target for VMware by 44%

Pat Gelsinger, CEO of VMware
Tony Avelar | Bloomberg | Getty Images

SunTrust increased its target price of VMware by 44 percent on Tuesday, upgrading the stock to buy from neutral on expectations of higher revenue growth due to the firm's full expansion into cloud computing.

"VMware's concerted efforts over last few years to transition away from being 'only' a server virtualization company are now complete. Now, VMware is a much broader access, cloud and data center software provider," SunTrust analyst John Rizzuto wrote. "Our estimates head higher. And with a backdrop of accelerating revenue, VMware's valuation looks compelling."

In the research note, the analyst increased the firm's 12-month price target to $92 from $64, an increase of 44 percent. The new level implies a gain of 22 percent from Monday's close.