EMC: Merriman Initiates at Buy on North American Rebound

Storage equipment maker EMC (EMC) today got its second thumbs up since Monday, with Merriman, Curhan Ford analyst Alex Kurtz initiating coverage of the company with a “Buy” rating. Instead of giving a price target, Kurtz said he used a “sum of the parts” approach to arrive at a “valuation range” of $15.72 to $19.21.

Kurtz’s initiation comes two days after Lazard Capital Markets analyst Ryan Hutchinson also initiated the stock with a “Buy.”

Kurtz thinks EMC’s partnerships with Cisco Systems (CSCO) and VMWare (VMW), in which it holds a financial stake, will enable it to be a “disruptive force” in corporate data centers in going up against IBM (IBM) and Hewlett-Packard (>HPQ). Furthermore, the company’s new products, including those developed from its pending acquisition of Data Domain (DDUP), will take the lead in sales pitches with clients rather than existing EMC products such as Clariion and Symmetrix. Although Europe and Asian markets could continue to be a drag on results, Kurtz sees a pickup in North America, with many delayed storage projects in corporate IT getting underway the rest of this year.

Kurtz’s estimates are for $13.6 billion in revenue this year, and 79 cents EPS, and $14.35 billion next year and 98 cents. That compares to consensus estimates of $13.5 billion and 78 cents, and $14.34 billion and 96 cents.

EMC shares today are down 20 cents, or 1.4%, at $14.40.