Avoid QLogic Corp. (QLGC) Says Goldman; Emulex PT Cut to $6

Goldman Sachs maintained a Neutral rating on Emulex (NYSE: ELX) and reduced its price target to $6.00 (from $8.00). Analyst Bill Shope trimmed estimates and commented on read-though for QLogic Corp. (Nasdaq: QLGC).

"We lower our estimates due to the lower revenue outlook and the under absorption of opex: our FY2014E, FY2015E, and FY2016E non-GAAP EPS decline to $0.51, $0.51, and $0.74 from $0.68, $0.83, and $1.00 previously. We maintain our Neutral rating but lower our 12-month price target to $6 from $8, based on a 9X multiple on our CY15E EPS of $0.69 (from $0.90)," said Shope.

"Sell-rated QLogic (Apr 30 close $11.58) reports earnings on May 1 after the close. Given significant challenges that Emulex faced in the server market, we see incremental risk to QLogic’s outlook, and we would avoid the stock," he added.

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

Shares of Emulex closed at $7.15 yesterday.

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