Benchmark Raises PT on Rackspace to $40 (RAX)

Benchmark is out with its report today on Rackspace

, raising its PT from $29 to $40. In a note to clients, Benchmark writes, "Rackspace (

), as a high-growth pure-play cloud company, is a takeover candidate as well. RAX has the highest growth in the sector at 23% and has a strong cloud brand. Managed hosting and cloud products are strategic services for telecom and IT companies, putting Cloud service providers are clearly in-play. With Verizon validating valuation at 14x EBITDA, We think RAX is a Buy. Our target rises from $29 to $40 per share." At the time of posting, RAX shares were trading at $35.15, up 9.13% from Thursday's close.