Deutsche Bank Downgrades NetApp (NTAP) to Sell
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Deutsche Bank downgraded NetApp (NASDAQ: NTAP) from Hold to Sell with a price target of $25. Analyst Sherri Scribner said secular storage market challenges aren't reflected in valuation.
"We are downgrading NTAP to a Sell from a Hold. NTAP shares are up 45% over the past 3 months and up 35% year to date as the stock has benefited from (1) a market shift into value stocks, (2) modestly better-than-expected sales, and (3) significant cost cutting which has driven upside to margins and EPS. While we applaud management's increased cost discipline, we remain cautious on the company's ability to return to revenue growth given the significant secular challenges posed by flash-based storage and the cloud. We view NTAP as particularly exposed to these trends and thus believe shares should trade at a discount to peers," said the analyst.
Shares of NetApp closed at $35.66 yesterday.
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