Morgan Stanley Wouldn't Chase Arista Networks (ANET)

Morgan Stanley analyst James Faucette reiterated an Equalweight rating and $275.00 price target on Arista Networks (NYSE: ANET) but thinks the stock fairly values the Microsoft driven optimism of increased spending in the second half. Rather than chase the stock, he suggests buying opportunistically in case Microsoft does not increase spending as expected.

The analyst stated "we think the stock is fairly valuing opportunities, and optimism for a better-than-forecast 2H19 from Microsoft (covered by Keith Weiss) has become pervasive post analyst meetings. For our part, we too expect hyperscale demand to return to normalized levels ahead of
the 400G cycle and we think enterprise data center activity remains healthy for Arista. We could look to get more constructive if valuation and potential for upside were to come together (especially if better demand from Microsoft fails to materialize this year). We think that the core data center business and the 2020 launch of 400G products (shipments expected to exceed those of 100G
sometime before 2021) is the most likely source of upside in the near to medium term. Over the longer term, we could become more positive if our checks and survey results were indicative of a faster than expected building pipeline for campus product sales".

For an analyst ratings summary and ratings history on Arista Networks click here. For more ratings news on Arista Networks click here.

Shares of Arista Networks closed at $282.74 yesterday.

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