Arista Networks (ANET) PT Lowered to $100 at Evercore ISI, adds to TAP list, Keeps Top Pick

Evercore ISI analyst Amit Daryanani lowered the price target on Arista Networks (NYSE: ANET) to $100.00 (from $130.00) while maintaining a Outperform rating.

The analyst comments "ALL YOU NEED TO KNOW: Arista is well positioned to beat and maintain (the revenue guide) against the lowest expectations we have seen for the stock in the past few years. Arista has become a consensus short over the past couple of months which has contributed to a 33% YTD drop in the stock (QQQ -13%). The short case hinges on the belief that they have lost share at Meta and Oracle, particularly in back-end networks. We think bears are expecting Arista to deliver high teens growth in CY25 and to fail to deliver on their $750M back-end AI target. Our more bullish stance is driven by the assumption that they will achieve their $750M target and deliver low 20s % growth in CY25 (vs current 17% guide). We are adding Arista to our tactical outperform list as we think they will maintain their FY revenue guide and $750M backend target. Beyond the Meta share loss debate, we expect most other trends to hold constant as Arista should continue to take share in enterprise networking (campus and DC) and we also think Apple increasing their AI datacenter plans creates an opportunity for Arista to ramp up their business. Arista will likely see a modest negative impact from the 10% baseline tariff on all countries other than China. Arista's manufacturing is mainly in Mexico and Malaysia, so we are cutting our EPS for each quarter by ~2% to reflect the impact of the 10% tariff. Net/net: Maintain TOP PICK as we think the share loss risk is overstated. Lowering PT from $130 to $100 on EPS and multiple cut. We see the upcoming Mar-qtr earnings report (5/6) as the catalyst for our tactical call."

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