Oppenheimer Has $6.50 Target On Brocade (BRCD)
Oppenheimer & Co. has a $6.50 price target on shares of Brocade Communications (NASDAQ: BRCD) after the company reported earnings yesterday after the bell.
In the research note, Oppenheimer & Co. writes, "With many moving pieces, Brocade reported softer sales than we had anticipated, but slightly higher EPS benefiting from a generous tax rate. After seeing its IP/Ethernet business rebound in FY2Q10, we were cautiously optimistic Brocade could deliver two solid quarters in a row. But, it failed. Consistent with our checks, gross margin was under pressure, but we were surprised by the magnitude of the contraction. Management's expecting a stronger FY4Q10, but this comes after lowering its annual guidance. With shares trading lower after hours, we see limited downside and look for its new portfolio to potentially help turnaround the Ethernet business in CY1H11."
Shares of Brocade are are down 28 cents to $4.86 this morning.
