It’s time to buy Pure Storage as it will outperform its peers, according to Morgan Stanley. Analyst Meta Marshall upgraded shares of Pure Storage to overweight from equal weight, saying the data storage company has several competitive advantages to weather broader economic challenges. “PSTG is generally a consensus long, and risks around NAND pricing and cloud capex do exist. However, we believe PSTG should fare better than our general enterprise names in macro weakness, given share gains and growing value proposition,” Marshall wrote in a Monday note. The analyst initially had some hesitation around Pure Storage this year, as rising interest rates and inflation hurt software names. However, the company’s growing market share and rising free cash flow has helped assuage concerns, according to the note. Shares of Pure Storage are down just 6.3% this year. “Progression of software story will help PSTG to be more resilient in macro weakness. While we are generally reluctant to step into exposed names currently, a few points make us more comfortable with PSTG. 1) Checks point to continued share gains, even as macro softens, 2) NAND pricing coming in makes value proposition more compelling, 3) if customers opt for subscriptions, PSTG is already well exposed to it,” Marshall wrote. To be sure, Pure Storage could continue to deal with issues ahead such as lower enterprise spending, changes to memory pricing and growing competition. Still, the analyst’s revised price target, raised to $37 from $35, implies shares can jump roughly 21.3% from here. The stock is off by just 6% this year, outperforming the broader market. — CNBC’s Michael Bloom contributed to this report.
