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

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

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

Brocade

The company beat earnings and provided an in-line guidance. The company also announced a new customer win with AT&T Inc. 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. NTAP gave at its earnings. Hall reiterates Brocade at an Overweight.

T-Mobile

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. 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.

Hewlett-Packard

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.