Wedbush Morgan Keeps 'Neutral' Stance on NetApp (NTAP); New CEO Focused on Shareholders

October 9, 2009 11:55 AM EDT

Wedbush Morgan maintains a 'Neutral' rating on NetApp (Nasdaq: NTAP), raises price target from $24 to $31.

Wedbush analyst says, "In our opinion, new CEO Tom Georgens will keep investors happy by being focused on keeping operating margins close to 16%. Georgens knows the storage systems market very well, having worked at EMC Corp (NYSE: EMC) and LSI Corp (NYSE: LSI) in the past. He is a very good engineer, a strategic thinker and a great salesperson. We believe bidding for Data Domain was the right thing to do and backing off at a high price, was also the right move. We believe that NTAP, under the new CEO, is not going to hire lots of people with the hope of growing much faster than the market, as it did in the past."

"Our new PT is obtained by applying a 19.5x multiple to our forward CY2010 earnings estimate of $1.59. NTAP’s peer group is currently trading at 19 times CY2010 earnings and since our estimate of NTAP’s growth rate is higher than the average growth rate of its peer group, we believe that a 19.5x multiple is appropriate for NTAP. Our Neutral rating is based on our relative performance expectation of NTAP compared to the rest of our coverage universe."

To see more analyst ratings on NTAP Click Here.

NetApp, Inc. provides enterprise storage and data management software and hardware products and services.

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