Summit Research Reiterates On Emulex

Summit Research commented on Emulex Corporation ELX Tuesday after the company raised Q2 guidance. The firm reiterated its Hold rating and $6 price target.

Analyst Srini Nandury believed the “Grantley upgrade cycle is still in initial throes (cycle to last three to four quarters), but what is more important is the demand for 16GFC continues to increase.”

“We believe FC has long tail and we expect it to remain dominant storage interconnect at least next five years (32 GFC already on the horizon). In addition, the company noted that SCOP revenues were also inline with its estimates, reversing several quarters of sub-par performance. Having said, we await for the evidence company can sustain the momentum before we can recommend the stock,” according to Nandury.

Summit will update its model after the company announces its F2Q15 results on January 29.

Shares of Emulex soared Tuesday and recently traded at $7.00, up 20.69 percent.