UPDATE: NetApp's (NTAP) Cloud Management Event Implies Bull Case Within Reach, PT to $102 at Morgan Stanley

Morgan Stanley analyst Katy Huberty raised the price target on NetApp (NASDAQ: NTAP) to $102.00 (from $96.00) while maintaining a Overweight rating after hosting Anthony Lye, SVP and GM of Public Cloud Services, to discuss how the portfolio is moving beyond hardware and more deeply integrating with public cloud platforms.

The analyst stated "we walk away with greater confidence that NetApp can hit or potentially exceed its PCS run-rate targets of $450-500M in FY22 and $1B by FY25. For context, NetApp's PCS business reached a $337M run-rate last quarter, growing 89% Y/Y. We also feel more confident in the pace of gross margin expansion and operating leverage as PCS scales. As the business approaches a $500M run-rate, or close to ~10% of revenue (Exhibit 1), we expect investors to begin shifting towards a sum-of-the parts based valuation framework. And, if NetApp can build greater confidence in the durability of PCS growth and the path to 75-80% PCS gross margins we would expect NTAP to trade closer to our $143 bull case".

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