Analysts Bump Up Arista Networks Price Target Post Q3 Results

Analysts raised their price targets on Arista Networks Inc ANET, following Q3 beat and upbeat Q4 outlook.
Barclays analyst Tim Long increased the PT to $451 from $378, implying an 8% downside, and reiterated an Equal Weight.
Long notes that Arista delivered more upbeat FY22 and long-term revenue guidance, driven by solid demand visibility in the Cloud Titan and enterprise segments.
Piper Sandler analyst James Fish raised the PT to $500 from $379, suggesting a 2% upside, and maintained a Neutral.
As a result of 2022 and medium-term targets that exceed estimates by 15%, increased visibility, and the inflection point of the 200/400G cycle, the shares rallied 15% in after-hours. The analyst "materially" raised estimates given these dynamics, though he says 2023-2025 estimates "will remain in question given the impact of the business cycle."
JPMorgan analyst Samik Chatterjee raised the PT to $500 from $455 and maintained an Overweight.
The combination of the Q3 earnings print and the analyst day "delivered multiple positive surprises" and is likely to drive "sizeable" upward revisions to consensus earnings, not only for 2021 or 2022 but also for normalized earnings through the cycle.
The analyst says strong demand from cloud customers as capex rebounds to normal, and the 200G/400G upgrade cycle ramps are fueling an acceleration to 30% revenue growth in 2022 following 25% growth in 2021.
JMP Securities analyst Erik Suppiger raised the PT to $540 from $415, indicating a 10% upside, and affirmed an Outperform.
Arista has sustained itself while bearing significant impacts due to the pandemic, and the ramp in 400gig is now on the near-term horizon, also citing the management's confidence in pent-up spend among Arista's cloud titan customers reflected in his "notable" revenue acceleration projections.
Wells Fargo analyst Aaron Rakers raised the PT to $490 from $375 and reiterated an Equal Weight.
While the analyst would agree with the very positive reaction in shares of Arista post "strong" results and upbeat forward-looking outlook/visibility commentary, he has decided to stay on the sidelines as he believes shares are appropriately valued at a low/mid-20-times EV/EBIT range on his updated 2023 estimates.
Credit Suisse analyst Sami Badri raised the PT to $509 from $410, suggesting a 4% upside, and maintained an Outperform.
The analyst notes that Arista's Q3 results were "solid" and beat expectations, albeit at lower magnitudes versus the Q1 and Q2 revenue beats/raises.
Morgan Stanley analyst Meta Marshall raised the PT to $460 from $420, indicating a 6% downside, and affirmed an Overweight.
Earnings showed upside, primarily driven by enterprise, an incremental $1 billion share repurchase, and the stock split was announced, and the company's longer-term targets provide some confidence in growth past 2022.
Evercore ISI analyst Amit Daryanani raised the PT to $520 from $480 and maintained an Outperform.
The analyst day provided a roadmap on how Arista can sustain mid-teens top-line growth and do so with a better product and vertical diversity.
Daryanani thinks EPS could end up in the range of $13.50-$15.00 for calendar 2022 versus the Street view at $12.
Cowen analyst Paul Silverstein raised the PT to $535 from $433 and affirmed an Outperform.
The analyst said the longer-term outlook and near-term results reinforce his view of significant upside to investor expectations.
BofA analyst Tal Liani raised the PT to $480 from $400 and maintained a Buy.
He increased his Q4 and 2022 estimates "substantially, to be streamlined with management's new targets" and normalized them for what he thinks could "prove to be overly conservative assumptions."
Price Action: ANET shares closed higher by 20.39% at $491.87 on Tuesday.

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