After Yesterday's Big Rise Brocade (BRCD) Flat; Analyst Says a Deal Makes Sense

After rising 19% yesterday on takeover speculation, shares of Brocade Communications (Nasdaq: BRCD) are flat today.

Yesterday, the Wall Street Journal reported that Brocade has quietly put itself up for sale with potential buyers including HP (NYSE: HPQ) and Oracle (Nasdaq: ORCL).

Analysts at Goldman Sachs commented on the possibility of a deal, saying the speculation highlights Brocade's strategic value. Goldman said Brocade's strategic value in the data center, but its role as an independent provider of networking could limit the interest in a take-out. However, with the consolidation in tech accelerating they think Brocade "is becoming a more attractive target" and could be a strategic fit for a number of potential acquirers. The firm raised their price target on Broacde to $10.50. Goldman said potential buyers could include HP (NYSE: HPQ), Juniper (Nasdaq: JNPR), Dell (NYSE: DELL), IBM (NYSE: IBM) and Oracle (Nasdaq: ORCL).

Real-Time Market Moving News Two-Weeks FREE http://www.streetinsider.com/premium_content.php

You May Also Be Interested In

• Viking Holdings (VIK) PT Raised to $82 at Mizuho
• Benchmark Reiterates Buy Rating on Rank One Computing (ROC)
• Cummins (CMI) PT Lowered to $675 at Jefferies