UPDATE: Piper Jaffray Reiterates Neutral Rating, Raises PT on Polycom

In a report published Monday, Piper Jaffray & Co. reiterated its Neutral rating on Polycom PLCM, and raised its price target from $10.00 to $12.00. Piper Jaffray noted, “We believe Polycom experienced better than expected demand in Q4 with a strong close in the final month. Despite the potential for near-term upside, we remain cautious on Polycom given structural concerns and declining sales. Adjusting for Polycom's recent divestiture (roughly $20M per Q), our $350M estimate for Q4 reflects a 9.6% y/y decline. We believe Polycom's upside is more related to beating conservative guidance versus fundamental demand improvements. We continue to believe the hardware portion of the video industry will see significant pricing erosion as the industry moves to services and software-based solutions. While Polycom is the leader in video hardware, we believe the company is playing catch up with other service and software competitors (Skype, Blue Jean Networks, Vidyo..etc). As a result, we are maintaining our Neutral rating on PLCM shares, but have raised our price target to $12 from $10.” Polycom closed on Friday at $11.31.