Story updated at 10 a.m. to reflect market activity.
VMware was gaining 1.8% to $97.71 in morning trading.
The analyst firm also lowered its EPS estimates for that company through 2015. Lower licensing can hurt VMware's margins according to BMO analysts.
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Separately, TheStreet Ratings team rates VMWARE INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate VMWARE INC (VMW) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and increase in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."VMW data by YCharts