UPDATE: FBN Securities Downgrades Silicon Graphics International Corp. to Sector Perform, Lowers PT as Federal Uncertainty Increases

In a report published Thursday, FBN Securities analyst Shebly Seyrafi downgraded the rating on

from Outperform to Sector Perform, and lowered the price target from $16.00 to $15.00. In the report, FBN Securities noted, “The company is not providing formal guidance for FQ2/Dec. due to a high degree of uncertainty in sales to the federal vertical (~40-50% of revenue), but it thinks that it has a good understanding of what rolls up to a $125M-$130M kind of number (we model $128M) for revenue. Still, SGI sees risks to the downside relative to its prior guidance of F2014 revenue growth being down 10% Y/Y (we now model F2014 revenue growth of -15% vs. -11% before). We see some risk in both the FQ2/Dec. quarter (by ~$10M or so) and in the FQ3/Mar. quarter (risk is present here as we assume a continuing resolution by Jan. 15, but it could still take some time for the government to return to normal spending patterns).” Silicon Graphics International Corp. closed on Wednesday at $15.31.