- Rumors have been circulating since last week of a Rackspace (RAX +1.1%) takeover. Wells Fargo and Oppenheimer & Co. have even issued technical projections relating to a possible deal.
- Rackspace reported Q2 results on Monday with news the company was offloading its Cloud Sites business, though did not mention anything regarding a full sale.
- Today, Cowen and Company restates an Outperform rating on the company and a $38 price target (current price $30.04). Analyst Colby Synesael projects FY 2016 revenue of $2.06B, EBITDA of $717M and EPS of $1.04.
- He cites improved cost management, slowing core growth, capital-light nature of support business, focus on profitability and strong demand for newer growth offerings in the memo.