NEW YORK (TheStreet) -- Rackspace Hosting (RAX) is up 7.52% to $35.18 today on the strength of an upgrade from Morgan Stanley (MS).
In a note published Tuesday, Morgan Stanley upgraded the open cloud company to "overweight" from "equal weight" with a price target of $45. The firm pointed to Rackspace's previous under performance but believes the company has metrics in place to overcome its hurdles.
"Rackspace's stock underperformance since 2013 has been driven primarily by a deceleration in revenue growth, concerns of increasing competition, and the retirement of its CEO in February 2014. We believe Rackspace is beginning to provide satisfactory mitigants to these factors, which may help ease the pressures on the stock performance going forward," the note said.
Separately, TheStreet Ratings team rates RACKSPACE HOSTING INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate RACKSPACE HOSTING INC (RAX) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income."