VMware stock closed up 1.7% to $147.90.
"Our upgrade is based on the pullback in the share price, resulting in [a] slight upside to our price target of 7% vs. the average in our coverage of 14%, and a resetting of investor expectations around the company's growth trajectory," analyst Heather Bellini wrote in a Sept. 5 note.
Bellini also cited consolidation of management-related products and traction around the company's various cloud-management tools as other factors behind the upgrade.
In the valuation overall, she cited "increased confidence" in the company's long-term product road map. "We also modify our estimates based on increased insights on management's long-term operating profile," she wrote.
VMware shares have fallen about 28% from a 52-week high of $206.80 in mid-May. The stock has risen 14% from its 52-week low of $128.69 in late August.
Goldman maintained its price target of $152. The average target price for the stock is $188.64, according to FactSet. The average recommendation is overweight.