) with a buy rating.
Analyst Keith Bachman believes the weak tech tape created an attractive entry point for EMC, which is currently trading at 26 times his 2005 estimate. He says the storage market is the most attractive portion of the IT hardware market with growth rates 2 to 3 times PCs or servers; EMC is one of few pure plays.
He believes the company will continue increasing the amount of software and services revenue it generates as a percent of total revenue, and drive improved gross and operating margins. He thinks EMC will reach over 51% gross margins in the second half, helping to drive 2 cents of EPS upside.
Backman sees EPS of 36 cents in 2004 and 52 cents in 2005. He sets a $17 12-month price target on the shares.