Credit Suisse Sees Challenges Ahead for NetApp Following Muted F3Q15 Revenue/EPS

In a report published Thursday, Credit Suisse analyst Kulbinder Garcha reiterated a Neutral rating and $40.00 price target on

. In the report, Credit Suisse noted, "NetApp delivered anemic F3Q15 revenue/EPS of $1.55bn/$0.75, short of our and consensus estimates of $1.63bn/$0.78 and $1.61bn/$0.77. Moreover, F4Q15 (April quarter) guidance of $1.55-1.65bn too was below consensus of $1.69bn. EPS guidance of $0.70-0.75 per share was lower than consensus. The company is focused on cloud storage with its hybrid strategy, however poor branded growth is likely to raise cannibalization concerns. While deferrals and limited budgets factored into the quarter, changing competitive dynamics, increasing competition in storage and uncertain traction in cloud may challenge NetApp's ability to achieve historic growth rates. We lower FY15E/FY16E EPS estimates by $0.22, to $2.76/$2.96 from $2.98/$3.18. We retain our Neutral rating." NetApp closed on Wednesday at $39.79.