NetApp Falls 2.5%, UBS Sees 'Mediocre' Outlook for Storage Spending

On Wednesday, UBS downgraded shares of NetApp

from Buy to Neutral and lowered the price target from $50 to $40, sending the stock lower by 2.65 percent to $36. Analyst Steven Milunovich sees a “mediocre” outlook for storage spending “as users pause and consider their alternatives.” NetApp faces “rising competition from start-ups as well as the cloud,” according to the analyst. In a recent UBS survey of Chief Information Officers, “NetApp was a clear share loser with only Dell scoring worse,” said Milunovich. “Although NetApp has done well selling to cloud providers, a shift off-prem is a long-term threat,” said the analyst. The FY15 revenue estimate was reduced from $6.46 billion to $6.33 billion, which reduced non-GAAP earnings per share estimate from $3.05 to $2.95.