UPDATE: Bank of America Merrill Lynch Reiterates Buy Rating, Raises PT on Brocade Communications
In a report published Monday, Bank of America Merrill Lynch reiterated its Buy rating on Brocade Communications Systems (NASDAQ: BRCD), and slightly raised its price objective from $6.00 to $7.00.
BofA Merrill Lynch noted, “Management reiterated the goal of paying off the $30mn remaining on its term loan this quarter and being net cash positive exiting F2012. Given Brocade's strong balance sheet and free cash flow (we model $425mn for F2012), we expect the company to continue to repurchase shares (bought back $70mn YTD). Tuck in acquisitions are also possible. The company seems fairly comfortable with its current debt level ($600mn), although refinancing provides an opportunity given interest rate of 6.75%.”
Brocade Communications Systems closed on Friday at $5.89.
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