NEW YORK (TheStreet) -- Shares of Rackspace Hosting Inc (RAX) are slumping, down 4.2% to $36.91 in early-market trading, after the cloud computing company was downgraded to "neutral" from "overweight" at JPMorgan Chase (JPM) .
The firm cited the company's risk/reward balance and noted the potential upside as high as $50 if a sale to CenturyLink Inc (CTL) happens, versus a fall back to the pre-sale level around $30 if nothing happens.
Analysts at JPMorgan Chase kept its $37 price target.
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 increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows: