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Why This JP Morgan Analyst Is Watching T-Mobile, Hewlett-Packard And Others Today

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JP Morgan’s Rod Hall is watching four names in tech on Friday: Brocade Communications System, Inc. (NASDAQ: BRCD), T-Mobile US Inc (NYSE: TMUS), Hewlett-Packard Company (NYSE: HPQ) and Arista Networks Inc (NYSE: ANET).

Brocade, T-Mobile and Arista Networks are coming off of earnings reports Thursday, and were all trading higher in the premarket. Here’s how Hall breaks it down:


The company beat earnings and provided an in-line guidance. The company also announced a new customer win with AT&T Inc. (NYSE: T), while also guiding to strong performance in IP networking. Perhaps most importantly, Hall notes, is how Brocade’s guidance diverged from a warning that NetApp Inc. (NASDAQ: NTAP) gave at its earnings. Hall reiterates Brocade at an Overweight.


The company reported capex guidance that was in line or better than JP Morgan’s estimates, while also noting that the EBITDA and margin was also better. EBITDA guidance was a little light, but Hall notes that T-Mobile’s earnings did not change JP Morgan’s view on the trajectory of carrier spending.

Arista Networks

The company beat and raised guidance, while noting that it does not expect resolution of its high-profile Cisco Systems, Inc. (NASDAQ: CSCO) lawsuit. That will come during 2016, at the earliest. Arista is trading substantially higher over the past two trading sessions, gaining more than 4 percent Thursday and indicated another 8 percent higher in Friday's premarket.


Hall is also watching Hewlett-Packard ahead of its earnings report next week following its announcement that it would produce a new line of open network switches. He expects this to play positively, while negatively impacting Cisco. The new switches will be produced with partnerships from Accton Technology and Cumulus Networks.

Latest Ratings for BRCD

Nov 2016WunderlichDowngradesBuyHold
Nov 2016DA DavidsonDowngradesBuyNeutral
Nov 2016RBC CapitalDowngradesOutperformSector Perform

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