Wedbush Raises Price Target on NetApp (NTAP), Concerned on Margin Contraction
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Price: $207.08 +1.02%
Rating Summary:
23 Buy, 31 Hold, 3 Sell
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Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
23 Buy, 31 Hold, 3 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Wedbush is maintaining its Neutral rating on shares of NetApp (NASDAQ: NTAP), but is raising its price target from $40 to $43 following the release of its Q4 results.
The company reported solid quarterly results with earnings and sales falling inline on record new customer additions. The firm highlights all the good was overwhelmed by the margin erosion, which it notes was driven by some one-time items, hardware component replacement costs, increasing mix of lower
margin OEM sales, competition, and higher discounting to win new customers.
Wedbush forecasts HDD supply constraints will continue to weigh on the company's results for the next few quarters.
An analyst at Wedbush comments, "our major concern long term is signs of intensifying competition, particularly versus EMC, which appears to be having a longer term impact on leverage in the model. We think in-line results and guidance will ease some investor concerns about decelerating growth, and we continue believe that the company is well positioned long term given traction with new products, its ability to maintain market share, and its skillful navigation of a challenging macro environment."
Following the release, the firm raised its FY12 EPS and sales estimates from $2.37 and $6.197 billion to $2.38 and $6.219 billion. Wedbush also tweaked its FY13 estimates from $2.70 and $6.882 billion to $2.69 and $6.932 billion.
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 $39.88 yesterday.
The company reported solid quarterly results with earnings and sales falling inline on record new customer additions. The firm highlights all the good was overwhelmed by the margin erosion, which it notes was driven by some one-time items, hardware component replacement costs, increasing mix of lower
margin OEM sales, competition, and higher discounting to win new customers.
Wedbush forecasts HDD supply constraints will continue to weigh on the company's results for the next few quarters.
An analyst at Wedbush comments, "our major concern long term is signs of intensifying competition, particularly versus EMC, which appears to be having a longer term impact on leverage in the model. We think in-line results and guidance will ease some investor concerns about decelerating growth, and we continue believe that the company is well positioned long term given traction with new products, its ability to maintain market share, and its skillful navigation of a challenging macro environment."
Following the release, the firm raised its FY12 EPS and sales estimates from $2.37 and $6.197 billion to $2.38 and $6.219 billion. Wedbush also tweaked its FY13 estimates from $2.70 and $6.882 billion to $2.69 and $6.932 billion.
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 $39.88 yesterday.
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