EMC (NYSE:EMC) Strengthened by Virtualization Trend in Data Center Segment

EMC (NYSE:EMC) should get a nice boost on their strong guidance, but also the realization they have a solid base to work from as virtualization increasingly becomes part of data centers.

FBR says, "We believe this quarter/better-than-expected 2011 guidance should be a nice shot of adrenaline for shares, as over the coming days/weeks/months we expect more investors to start giving EMC 'credit' for its accelerated storage growth cycle, which should help move shares higher accordingly during 2011. We believe that while storage is a mature industry, the move toward virtualization within the data center puts EMC in the driver's seat to take advantage of this next-generation technology shift given the company’s massive installed base, brand awareness, expanding product breadth, and unique approach to the market (storage, virtualization, security).

"For 1Q11 (March), we are increasing our total revenue estimate from $4.29 billion to $4.38 billion, while our pro forma EPS estimate remains at $0.31. For FY11, we are raising our total revenue estimate to $19.6 billion from $18.6 billion while maintaining our pro forma EPS estimate of $1.46...We are also introducing our FY12 total revenue and pro forma EPS estimates of $21.5 billion and $1.68."

FBR Capital maintains an "Outperform" rating on EMC (EMC), which closed Tuesday at $24.39, gaining $0.56, or 2.35 percent. FBR boosted their price target on EMC from $26 to $27.