Niche tech stock Pure Storage (PSTG 2.91%) 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.
NYSE: PSTG
Key Data Points
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.
