UBS Raises Price Target on NetApp (NTAP) to $32; Reiterates Sell

UBS reiterated a Sell rating on NetApp (NASDAQ: NTAP), and raised the price target to $32.00 (from $30.00), following the company's 2Q earnings report. NTAP reported product revenue of $710mn, below consensus of $722mn.

Analyst Steven Milunovich commented, "Product revenue of $710mn was down 13% YoY and below consensus of $722mn, but the operating margin of 15.2% was 160bps better than consensus of 13.6%. The margin upside was driven by (1) a 60bps higher gross margin of 62.7%, and (2) 100bps from lower opex, though cutting R&D 5% more than we expected is a concern. The $0.06 beat shows costs are well controlled, but we remain concerned about secular storage pressures that may result in future disappointments."

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 $34.73 yesterday.

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