Sun Microsystems

Analysts Not Impressed With Analyst Day

Sun Microsystems (SUNW) held its annual investor's day with the investment community yesterday. Analysts seemed not to share Jonathan Schwartz's, CEO of Sun, enthusiasm for where the company is headed.

Here are some opinions from analyst reports which were posted on Barron's Tech Trader Daily:

Richard Gardner of Citigroup believes Schwartz continues to adopt the view that Sun’s decision to open source its entire software stack will drive developers and users to its platform(s), eventually creating opportunities to monetize R&D investments. Gardner agrees with the premise that volume drives value, but how much value, for whom and over what time period is still unclear.

Thomas Weisel analyst Kevin Hunt still has concerns regarding the "lackluster" storage business (tape market and integration of StorageTek), and as a result, maintains a Market Weight rating on Sun's shares.

Deutsche Bank’s Chris Whitmore believes that Schwartz and his team are driving operational and product line improvements, but that this is more than reflected in Sun's shares. Whitmore believes Sun’s operating margin goal requires double digit revenue growth through F09, and maintains a Hold rating with a price target of $5.50.

Goldman Sachs’s Laura Conigliaro said, "There are significant execution elements to be hurdled and timing could be lumpy.”

While analysts reports are peppered with optimistic caveats, they are few and far between. Also, analysts and investors are still questioning the reasoning behind the convertible bond offering with KKR.

Sun's stock has had a massive rally recently, it might be time to take some profits.