While the market is cheering the
Justification For Bearish Stance
The brokerage pointed out
“With Mature product revenue still shrinking (-29 percent WY in Oct) and likely to stabilize at lower levels, we see a return to sustainable product revenue growth as unlikely,” analyst Katy Huberty wrote in a note.
Further, Huberty’s checks from resellers and CIOs suggest NetApp isn't positioned to rebuild share longer term, while cost cutting is not a sustainable strategy.
It's Not All Negative
On the positive side, the analyst said
Given expectations of further cost cutting, the analyst raised FY 2017 EPS estimate to $2.60 from $2.41, and price target to $26 from $24.
At last check, shares of NetApp rose 7 percent to $37.20.
|Nov 2016||Maxim Group||Downgrades||Buy||Hold|
|Nov 2016||Drexel Hamilton||Upgrades||Hold||Buy|
|Nov 2016||OTR Global||Downgrades||Mixed||Negative|
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