UPDATE: Morgan Stanley Downgrades NetApp

Morgan Stanley on Monday downgraded shares of

from Equal-weight to Underweight and lowered the price target from $47 to $31. Analyst Katy Hubert believes storage spent will “remain under pressure in 2014, consistent with the 30bps decline last year.” Cost cutting will not be enough to expand margin levels and as a result, Hubert reduced “FY2015 operating margin estimates to 16.3% from 17.9%, vs consensus estimate of 18.1%.” The analyst sees “more room for cash return or M&A that evolves the product portfolio” as a bullish scenario, “given the company's $12 per share of net cash.” Shares of NetApp are down 4.6 percent to $36.06 on the back of the downgrade.