UPDATE: UBS Maintains its Neutral Rating of Brocade Communications Systems

UBS has published a report maintaining its Neutral rating of Brocade Communications Systems BRCD while raising its price target to $5.75 from $5.25 In the report UBS stated that "the CEO announced that he intends to resign once a successor has been appointed. The CEO was also heading the sales organization since June 4 when Ian Whiting, the previous head of sales, departed. We believe this creates some intermediate term uncer tainty as to when, and who, will fill these key roles. We believe 3Q highlighted BRCD having some success with its ICX enterprise switch and its VDX data center switch, as well as an ongoing ramp of 16gps storage. However, given the upside in federal in 3Q (unclear how sustainable), and ongoing volatility q/q in the model (Ethernet products back to negative y/y growth in F4Q), we still lack clarity on the normalized growth/margin profile of the model." Brocade Communications Systems traded around $5.70 Friday