Everpure (P) could sustain faster revenue growth and wider operating margins as it gains storage market share and expands into artificial intelligence-related products, Morgan Stanley said in a note Thursday.
The company's outlook suggests revenue growth plus operating margin could support a new "Rule of 60" in fiscal 2028, compared with its previous "Rule of 40" benchmark.
Morgan Stanley said it expects growth in Everpure's core market and new AI-related products to support the improvement.
Looking ahead, Everpure estimates its market could reach $207 billion by 2030, up from $50 billion today, as it expands into data software, AI infrastructure and storage for large cloud providers. Morgan Stanley said the company's common architecture and software could help it compete across those markets.
Morgan Stanley now forecasts fiscal 2028 revenue of $7.15 billion and operating income "at the midpoint" of management's preliminary $1.7 billion to $1.9 billion outlook. It raised its fiscal 2028 and 2029 EPS estimates by 15% to 30%, citing stronger expected growth and margin expansion.
Morgan Stanley maintained an overweight rating on Everpure and raised its price target to $137 from $119.
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