Already a Bloomberg.com user?
Sign in with the same account.
Prudential upgraded Novell (NOVL
) to neutral from underweight.
Analyst Brent Thill says his upgrade follows a 20% share price decline since he initiated coverage on Feb. 18. He notes at Tuesday's $9.46 close, Novell traded within 5% of his $10 target. He says 2003 Linux-related acquisitions of SuSE and Ximian provides Novell with the opportunity to significantly improve financial prospects over the next few years.
However, Thill says Novell faces formidable integration and execution issues as it shifts to becoming a Linux platform vendor. He believes Novell's lack of clarity on the strategy and pricing of Linux-related initiatives is largely played out and reflected in the current share price.