BRCD May Outpace Market Growth
Goldman Sachs reiterated its “buy” rating for Brocade Communications (NASDAQ: BRCD). The 12-month price target is set to $10.50.
Goldman Sachs expects BRCD’s October quarter to beat consensus expectations. Goldman Sachs believes that the performance of BRCD would have been balanced during the quarter. BRCD’s robust results for the October quarter are likely to act as a catalyst for the company’s share price, according to Goldman Sachs. BRCD’s gross margins are likely to expand sequentially on the back of improvement in cost structure and supply chain management.
Goldman Sachs believes that Brocade Communications’ increasing traction with the OEM partners may enable the company to outpace the market’s growth. Goldman Sachs does not expects BRCD to be acquired in the near term, after its potential acquirer Hewlett-Packard Company (NYSE: HPQ) has bought 3Com (NASDAQ: COMS).
