NTNX Upgrade before earnings

Shares of Nutanix Inc. NTNX, +0.96% are up 1.3% in premarket trading Thursdaty after J.P. Morgan analyst Mark Murphy upgraded the stock to neutral from underweight and raised his price target to $54 from $39. The new target is about 12% below Wednesday’s closing price of $61.13. “We are admitting our mistake in underestimating investor appetite and view Nutanix shares as having a balanced risk-reward profile at current levels,” Murphy wrote. His most recent channel checks found strong demand for Nutanix’s hyperconverged infrastructure solutions. Murphy expects the company to report a strong July quarter but cautions that operating expenses for the 2019 fiscal year, which ends next July, “could put pressure on operating margin.” Nutanix shares have gained 179% over the past 12 months, while the S&P 500 SPX, +0.57% has gained 19%.

54$ is not a very optimistic price target.