Citi Downgrades F5 Networks, But Boosts Price Target To $132

In a report published Monday, Citi analyst Ehud Gelblum downgraded the rating on

from Buy to Neutral. The price target was raised from $122 to $132 due to stronger sector and overall market comps. The analyst believes that upside from the current stock valuation could be difficult, given that revenue growth is expected to stay in the single digit range in the foreseeable future. At the same time, the analyst does not expect the company to lose market share or witness a decline in its margins if the Services business continues its strong performance. "Instead, we believe the stock likely pauses in the $120-135 range until the company finds the next leg of growth. F5 remains the leading ADC vendor… However, we expect growth to moderate over the next several years as we get further removed from F5's recent product cycle on difficult comparisons into H2'FY15," Gelblum said. The analyst expects the company's product revenue growth, which is a key driver of its share price, to decelerate over the next few years, limiting upside from the current levels for the stock.