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In a report published Wednesday, Deutsche Bank reiterated its Hold rating on STEC
STEC, but lowered its price target from $7.00 to $5.00.
Deutsche Bank noted, “Guides lower as company tries to transition its business. STEC's better-than-expected F3Q-12 results were overshadowed by F4Q-12 guidance which was well below Consensus expectations. Lower volumes remain a GM pressure and the company continues to operate below breakeven levels of $70M per quarter. STEC is trying to expand its sales focus from OEMs to opportunities in enterprise and the channel. While we see expanding the customer base as a smart move, the success of this strategy is not guaranteed. We have reduced our estimates and PT from $7 to $5 to reflect lower demand and increased uncertainty. We have also introduced FY-14E. Maintain Hold.”
STEC closed on Tuesday at $5.63.
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