Raymond James upgraded shares of Rackspace Technology Inc (NASDAQ:RXT) to Outperform from Market Perform with a new price target of $3.50 in a note to clients on Tuesday.
Analysts told investors the firm is upgrading the stock based on its turnaround traction.
"In the last 12 months, the management team has changed over, reorganized the business, and changed its strategic direction," explained the analysts. "These changes are still in motion, but we believe the adjustments are taking hold and will push the company back toward previous levels of revenue and EBITDA in the next 12-18 months."
"We believe the outlook will steadily improve, and while there may be some bumps, the improvements will become obvious to investors and push the stock higher."
The analysts also noted that the company's management is confident after three years, while its Private Cloud business has been "refocused under new leadership after having been neglected."