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Splunk Stock Downgraded by RBC Capital Amidst Cisco Acquisition

By Don Francis, Editor
September 26, 2023 6:38 AM UTC
Splunk Stock Downgraded by RBC Capital Amidst Cisco Acquisition

RBC Capital's Matthew Hedberg downgraded their rating on Splunk (NASDAQ: SPLK) from Buy to Hold on 2023/09/22. The analyst also raised their price target by 18.9% from $132 to $157.

Hedberg made their moves after it was announced on 2023/09/21 that Cisco had entered into a definitive agreement to acquire the company for $157 per share in cash, representing $28B in equity value.

The analyst argued that "the deal makes a lot of sense given the potential for synergies between Splunk and Cisco's security business and the AppDynamics platform."

Hedberg told investors to expect regulatory scrutiny but noted that "the deal doesn't need China approval."

The takeover valuation is fair, the analyst added, and other bidders are not likely.

This rating update comes alongside other rating updates on September 22, 2023:

- Mizuho's Gregg Moskowitz raised their price target by 35.3%, from $116 and maintained their Hold rating on the stock. - BMO Capital's Keith Bachman raised their price target by 23.6%, from $127 and downgraded their rating on the stock from Buy rating to Hold. - Rosenblatt's Blair Abernethy raised their price target by 8.3%, from $145 and downgraded their rating on the stock from Strong Buy rating to Hold.

Currently, 43.5% of top-rated analysts rate SPLK as a Strong Buy or Buy, while 56.5% see it as a Hold. No analysts recommend or strongly recommend selling the stock.

Since SPLK's last quarterly report on 2023/07/31, the stock price has increased by 33.9%. Year-over-year, the stock is up 74.2%. During that period, SPLK has outpaced the S&P 500, which is up 15.4%.

RBC Capital analyst Matthew Hedberg is ranked by WallStreetZen in the top 11% out of 4,337 Wall Street analysts, with an average return of 1.9% and a 46.4% win rate. They specialize in the Communication Services, Industrials, and Technology sectors.

Splunk Inc., a software and cloud solutions provider, delivers and operationalizes insights from data generated by digital systems in the United States and internationally. The company offers various solutions, including Splunk Platform, Splunk Security solutions, Splunk IT Solutions, and Splunk Observability Solutions. Additionally, it provides Ecosystem Solutions, adoption and implementation services, education services, and maintenance and customer support services. Splunk Inc. sells its offerings directly and indirectly through various routes to market with various partners. The company was incorporated in 2003 and is headquartered in San Francisco, California.

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