UPDATE: Wells Fargo Initiates BMC Software at Outperform

Wells Fargo is out with its report today on BMC Software BMC, initiating BMC at Outperform. In its report, Wells Fargo writes, "In our view, BMC is well positioned to benefit from secular trends in cloud management and virtualization and is one of our top picks to play the cloud/virtualization opportunity. Our valuation range represents a 2.9-3.2x EV-to-sales multiple, 12.5-15.7-P/E multiple and 6.6x- 7.5x EV-to-CF multiple based on our CY12 estimates. The stock is down 38% from its July high and both the EV-to FCF ratio and DCF metrics suggest that the stock is undervalued." At the time of posting, shares of BMC were trading at $41.02, up 1.33% from Tuesday's close.