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LakeStreet Analysts Raise NetApp Price Target On Solid Q1 Results

LakeStreet raised its estimates and price target on NetApp Inc. NTAP 16.36% following the company's first quarter results exceeded consensus in both revenue and EPS.

The results showed that the headwinds in OEM and legacy ONTAP are diminishing with the law of small numbers while AFA and ONTAP 9 transitions are gaining momentum.

Amid "choppy" demand environment, the company's second quarter outlook is in line with consensus. The company expects EPS of $0.51-$0.56 on revenue of $1.27 billion to $1.42 billion, while consensus is at $0.55/$1.33 billion.

Analyst Eric Martinuzzi raised his FY17 EPS estimate to $2.42 from $2.36 while maintaining revenue view at $5.435 billion. The analyst, who maintained his Hold rating on shares, also upped the price target to $31 from $26.

"While we like the company's clustered storage technology and virtualization-friendly architecture, we still face the reality of likely negative comps in product sales in the near term. We believe revenue outperformance in the near term is possible, but it will take a clear path to sustained product growth for us to get more constructive on the shares," Martinuzzi noted.

At time of writing, shares of NetApp surged 16 percent to $33.44.

Aug 2016CLSAMaintainsUnderperform
Aug 2016SusquehannaUpgradesNeutralPositive
Aug 2016Deutsche BankMaintainsHold

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