In a report published Thursday, Stifel analyst Aaron Rakers downgraded the rating on NetApp NTAP from Buy to Hold, and removed the $47.00 price target.
In the report, Stifel noted, “Reduced estimates, a maturing hardware product cycle story (albeit we remain positive on Data ONTAP 8.2), emerging competitor activity/sentiment, and tougher 2HF2014 branded/configured compares, coupled with persisting uncertainties in US federal spending, leave us to downgrade NetApp from Buy to Hold ahead of the upcoming F2Q14 earnings (11/13; AMC). While we admit that this call should have been made a few months ago and we believe share performance over the past few months has exhibited a healthy degree of estimate/expectation de-risking, we view consensus expectations as too high and think multiple expansion drivers will be limited given ongoing secular concerns/questions in enterprise storage. Shares of NetApp currently trade at 13.3x our reduced C2014 non-GAAP EPS estimate; 6.1x EV/EBITDA.”
NetApp closed on Wednesday at $38.77.
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