UPDATE: Goldman Sachs Downgrades Emulex to Sell on Deteriorating Risk./Reward

Goldman Sachs reduced its rating on Emulex (NYSE: ELX) from Neutral to Sell and cut its price target from $7 to $6. Goldman Sachs commented, "The absence of a positive catalyst—the Romley-driven product cycle—has made us incrementally negative on ELX shares. We believe that as adoption of this new platform remains tepid in the quarters ahead, investors will increasingly re-focus on the long-term secular challenges facing Emulex. Moreover, the absence of a product cycle boost introduces more near-term cyclical risk for the server market in general. We expect this to become apparent with the earnings reports of Emulex and its key customers, supply chain partners, and competitors."Emulex closed at $7.35 on Friday.