UPDATE: Piper Jaffray Initiates Emulex Corporation at Neutral on Near-Term Uncertainties
Piper Jaffray initiated coverage on Emulex Corporation (NYSE: ELX) with a Neutral rating and a $8.00 price target.
Piper Jaffray said, "Emulex' core market (Fibre Channel HBA) has been in a secular decline for the last few years, which has prompted management to search for new growth opportunities in the Ethernet market. While we are confident Emulex can succeed in the Ethernet market, the ongoing patent litigation, coupled with the pending closure of the Endace acquisition, is keeping us on the sidelines. If revenue and cost synergies from this acquisition start to play out sooner than expected, we would be inclined to re-evaluate our overall thesis on shares of ELX. As such, we are initiating with a Neutral rating and $8 price target.
Emulex Corporation closed at $7.41 on Tuesday.
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