Pacific Crest Downgrade EMC With Seasonal, Secular And Competitive Risks Cited

In a report published Thursday, Pacific Crest analyst Brent Bracelin downgraded shares of

to Sector Perform from Outperform with no established price target (but a fair-value range of $24 to $28) due to increasing seasonal, secular and competitive risks. According to Bracelin's North American field checks, enterprise demand for storage appears to be below typical March seasonality and sales representatives are "scrambling" to close deals. The analyst continued that seasonal weak enterprise hardware demand in the U.S. could "exacerbate" the ongoing currency impact tied to international sales. The analyst's downgrade is also tied to the company's "new appetite to consolidate" which holds the potential to elevate near-term execution risks. In addition, the company faces margin risk as pricing is turning more aggressive and secular shifts in technology could be accelerating faster than the company's ability to transform and diversify beyond storage.