RBC Capital Raises Price Target on Brocade Communications (BRCD) to $11 Ahead of 3Q
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RBC Capital reiterated a Sector Perform rating on Brocade Communications (NASDAQ: BRCD), and raised the price target to $11.00 (from $10.00), ahead of the company's 3Q earnings report. RBC is expecting results to be in-line.
Analyst Mitch Steves commented, "Heading into the Jul-qtr print, we think results will be largely in-line with potential upside from Wireless LAN equipment due to the recent acquisition of Ruckus Wireless. In addition, we think the company has purchased a material amount of shares heading into the quarter (~1M+ a day) to offset the shares issued for Ruckus. Specifically, prior to the close of Ruckus (May 27, 2016) the Company's average daily trading volume (ADTV)was 5.4M while the ADTV post close was 7.0M or ~1.6M more than usual (share repurchases). Given this dynamic, we think the share count should be slightly lower than expected and we see Ruckus accounting for additional inorganic growth particularly in 2HCY16. Net Net: we adjust our price target to $11 (from $10) on the back of share repurchases and potential upside from WLAN Equipment in 2HCY16."
Shares of Brocade closed at $10.24 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change
Related EntitiesRBC Capital, Earnings, Definitive Agreement
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