UPDATE: Oppenheimer Downgrades Aruba Networks to Perform, Removes PT on Too Many Variables

In a report published Friday, Oppenheimer analyst Ittai Kidron downgraded the rating on Aruba Networks

from Outperform to Perform, and removed the $23.00 price target. In the report, Kidron noted, “We're downgrading Aruba to Perform from Outperform and removing our $23 price target. We still see strong secular growth in WiFi, but we also see several Aruba-specific issues brewing. Competitively, we're concerned that losses to Cisco are in their early stages given aggressive bundling and the introduction of the Catalyst 3850 switch/WiFi combo, just now beginning to make its impact. While management views this headwind as one that would pass, we believe that Aruba will have to respond,putting pricing and GM at risk. Further, there's the distraction of integrating Meridian.Aruba could become an attractive M&A target, but with growth and margins in question we see potential for further downside and are stepping to the sidelines.” Aruba Networks closed on Thursday at $17.61.