Niche tech stock Pure Storage(NYSE: PSTG) had a fine Wednesday on the market, with its shares racing nearly 5% higher in value. By contrast, the S&P 500 index slumped by 0.8%. Investors were cheered by the company's inclusion on an important brother index to the S&P 500, plus an analyst's price target increase.
Pure Storage is about to get an index graduation
After market hours on Tuesday, S&P Global Indices -- the company behind the iconic S&P 500 index and many other equity trading benchmarks -- announced that Pure Storage is to be a component stock of the S&P MidCap 400 index. The company offers digital data storage products on both a consumption and subscription basis.
Pure Storage is replacing the healthcare sector's Patterson Companies. The latter is to become a component of the S&P SmallCap 600 index, where it will take the slot currently occupied by fashion stock Chico's Fas. Sycamore Partners is buying out Chico's Fas. Additionally, according to S&P Global Indices, Patterson's market cap these days "is more representative of the small-cap market space."
These changes are coming very soon. The index operator said they will take effect prior to the start of trading this Friday, Jan. 5.
Stifel bumps its price target to $41 per share from $38
Perhaps not coincidentally, Stifel analyst Chris O'Cull added $3 per share to his Pure Storage price target for a new level of $41 prior to Wednesday's opening bell. He maintained his buy rating on the stock as he did so. It wasn't immediately clear why O'Cull made his move, and whether the S&P Global Indices action had anything to do with it.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
