UPDATE: Goldman Sachs Reiterates Neutral Rating, Lowers PT on STEC

In a report published Wednesday, the Goldman Sachs Group reiterated its Neutral rating on STEC

, but slightly lowered its price target from $8.00 to $7.00. Goldman Sachs noted, “We think STEC's weak guidance reflects a tepid adoption rate of its new Gen 4 product by storage OEM customers thus far as well as the extended customer qualification process cited by management. We expect both fundamentals and the stock to lag the group over the next two quarters given the continued setbacks to a ramp in STEC's new product sales. However, we remain Neutral on the stock, as we see limited downside at these levels given (1) STEC's potential as an M&A candidate and (2) the company's significant cash balance of about $4.50 per share (60% of market cap).” STEC closed on Tuesday at $7.52.