RBC Capital Raises Price Target on NetApp (NTAP) to $32 Following 1Q Beat
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RBC Capital reiterated a Sector Perform rating on NetApp (NASDAQ: NTAP), and raised the price target to $32.00 (from $29.00), following the company's 1Q earnings report. NetApp posted revenue of $1.29B and non-GAAP EPS of $0.46 vs. consensus expectations of $1.26B/$0.36.
Analyst Amit Daryanani commented, "NTAP's positive Jul-qtr print/in-line Octqtr guide should provide investors with some level of comfort around the company's near-term revenue stabilization/cost reduction story. Management also outlined aspirations of: 1) 15-17% operating margin in FY17 (implies ~18% op margins for H2:17), 2) a return to growth in product revenue in H2:17, and 3) revenue growth exiting FY17. The company also provided high level targets of "moderated" revenue growth and 18% operating margin for FY18. While the near/medium-term outlook should be positive for NTAP, we note that attaining these ambitions would hinge on the company's ability to revert to consistent product revenue stabilization, maintain positive service/software growth and successfully execute on its cost reduction plans. Given better contributions from SolidFire and growth in strategic products (all-flash, hybrid cloud, OnCommand Insight, etc.) we think there is a bridge to achieve these targets, but wait for a better history of execution before we become more positive on the name. Maintain SP rating and raising price target to $32."
Shares of NetApp closed at $28.85 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change
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