UPDATE: FBN Securities Upgrades NetApp to Outperform on Attractive Valuation

FBN Securities raises its rating on NetApp

from Sector Perform to Outperform, but reduces its price target from $45 to $37. FBN Securities comments, "We are upgrading shares of NTAP back to Outperform from Sector Perform but lower our PT from $45 to $37. The company provided disappointing guidance (revenue down 12-18% Q/Q) and is noting that EMEA (31% rev.) and the financials vertical (~10% rev.) are weakening. In after-hours trading, these concerns led to a share price of around $28-29, a level which we find attractive for the following reasons: 1.) NTAP has net cash of roughly $11/share, or roughly 40% of the after-hours share price, 2.) If NTAP's shares stay around $28-29 (EV/rev. of around .9x; P/E ex-cash of around 8-9x), then we feel that NTAP could become an attractive target for larger technology companies such as CSCO and IBM, and 3.) the company is now growing its low-end (2000-series) well (units up 23% Y/Y, up 43% Q/Q)." NTAP closed at $32.86 on Wednesday.