UPDATE: Goldman Sachs Downgrades NetGear on Retail/SP Headwinds
In a report published Wednesday, Goldman Sachs analyst Kent Schofield downgraded the rating on NetGear (NASDAQ: NTGR) from Neutral to Sell, and lowered the price target from $33.00 to $28.00.
In the report, Goldman Sachs noted, “We downgrade Netgear to Sell from Neutral and reduce our 12-month price target to $28 from $33 on our belief that (1) the U.S. retail WLAN market is in secular decline, not cyclical, (2) Netgear's retail WLAN market share is approaching peak levels of share and gains will slow as new competitors enter the U.S. market, and (3) the proliferation of home media gateways in 2H2013 will weaken Netgear's position in the service provider market in 2014. We lower our CY2014E P/E multiple to 11X from 12X as Netgear has a 0% 2012-2014E EPS CAGR, vs. our coverage group median of 13%. Our price target implies 14% downside vs. 9% average upside for our coverage.”
NetGear closed on Tuesday at $32.71.
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