Longbow Thinks IT Storage Temperature Is Rising

In a note Thursday, Longbow Research published its mid-third quarter survey of IT storage resellers, which reflected additional signs of optimism.

In particular, the firm focused on EMC EMC and Network Appliance NTAP.

Key takeaways:

EMC (Buy)

"EMC should benefit from the macro uplift, particularly the ongoing improvement for large infrastructure deals. - We are raising our EMC sales forecasts primarily in 4Q, to reflect the stronger outlooks at the reseller base. We added ~$100M of sales to our model, and now forecast +3.0% sales growth for EMC storage. Our EPS forecast is unchanged at $1.92."

Network Appliance (Neutral)

"We rate NTAP NEUTRAL, admittedly having missed an upgrade opportunity when our July reseller checks called U.S. Federal upside (confirmed by NTAP 1Q). Today at 13.5x forward earnings, we prefer to wait for a better entry point."