Collins Stewart Downgrades NetApp (NTAP) to Hold; Second Miss in a Row Raises Concerns

Collins Stewart downgraded NetApp (NASDAQ: NTAP) to Hold with a price target of $40.00.

Collins analyst says, "Given two consecutive quarters in a row (and 3 of the last 4) of missed expectations we believe the company needs to show consistent performance before investors are likely to reward it with a higher multiple. Similar to our preview, Public sector rev came in very strong, up $94M q/q to $262M. With the July qtr at $1.458M, the rest of NetApp's business only had to be flat q/q in order beat consensus of $1.53B. However, Europe was down $28M q/q, Asia fell $7M & US Commercial fell $10M, odd given October is typically a stronger qtr vs. seasonally soft July. Forward guidance for 1%-7% q/q growth also disappointed with the 4% mid-point below normal seasonality of +6% despite being off of a weaker Oct qtr number. We move to the sidelines until valuation and growth expectation re-set."

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

Shares of NetApp closed at $40.74 yesterday.

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