Arista Networks (ANET) PT Raised to $300 at Citi, Adds to US Focus List

Citi analyst Atif Malik raised the price target on Arista Networks (NYSE: ANET) to $300.00 (from $220.00) while maintaining a Buy rating.

The analyst comments "We maintain ANET as our #1 networking equipment pick into 2024 on sustainable growth in enterprise led by share gains and growing AI opportunity in the cloud from Ethernet adoption (see InfiniBand vs Ethernet debate). Moreover, our recent supply chain discussions point to a recovery in non-AI hyperscale capex starting in 2Q24, which should lift Arista’s 400G biz. We are raising our FY24/25 EPS by 9c/36c to better align with our proprietary Ethernet penetration scenario analysis and the company’s L/T target model. Our revised TP of $300 is based on an increased 36x forward PE multiple vs 31x prior and reflects a mid-teens discount to the stock’s prior peak multiple and a high-teens premium to current valuation. We believe this valuation is warranted by Arista’s growing exposure to hyperscale capex and our expectation that shares will re-rate as general purpose data center infrastructure spend rebounds next year. Reiterate Buy."

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