Deutsche Bank Starts NetApp (NTAP) at Hold

Deutsche Bank initiates coverage on NetApp (NASDAQ: NTAP) with a Hold rating and a price target of $36.00.

Analyst Sherri Scribner comments, "NetApp has historically seen high growth, but sales have stalled in the past two years. Weak OEM and Federal sales have been part of the problem, but we also believe NetApp's medium-sized businesses are exploring putting more workloads in the Cloud. Offsetting weaker sales, is the company's innovative Clustered Data ONTAP operating systems, which we believe is an attractive platform for cloud providers. We expect growth to remain challenged by secular changes in IT, and thus believe market multiples are more appropriate for the shares. With the stock trading near these levels, we rate NTAP a Hold. "

Scribner notes growth rates are decelerating. "Versus its 10-year CAGR of 22%, NetApp’s growth decelerated to 2% in FY-13, reflecting in some part the company’s high exposure to Federal (13% of sales), and declining OEM sales, as well as overall weakness in the storage market (down 2%)," she comments.

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 $37.66 yesterday.

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