Wunderlich Downgrades Brocade to Hold, maintains Price Target

In a note out this morning, Wunderlich Securities downgraded shares of Brocade Communications

from Buy to Hold, maintaining the $12 price target. Wunderlich feels the shares are fully priced at these levels and are waiting for further development of growth potential. In the note, the firm goes on to say: "While F4Q14 was a solid performance for Brocade (BRCD), the growth outlook is insufficient to offer meaningfully incremental valuation headroom; our $12 price target is unchanged. With several quarters remaining before the Gen 6 product cycle starts or when data center Ethernet/IP products and/or network function virtualization (NFV - software routers) grows sufficiently to drive overall results, we believe there is time to wait for a more attractive opportunity to invest in Brocade. We are downgrading our rating to Hold from Buy." They also mention several key points; -Good margins -Robust cash flow -Storage Area Networking (SAN) in line, Ethernet/IP a little better -Moderate upward forecast adjustment Shares of BRCD are lower by 2 percent in pre-market trading at 11.32.