Piper Sandler analyst James E. Fish has downgraded Arista Networks Inc ANET to Neutral from Overweight and maintained a price target of $190.00.
The analyst is bearish on concerns related to network spending in both cloud and enterprise in 2024. He sees the Switches segment at higher risk and expects it to decline in spending on a pressurized IT budget.
Nevertheless, the analyst expects an upside into Q3 and views Arista as a "secular winner in a cyclical space" on strong exposure across verticals, networking markets, customers, and high AI potential.
The analyst sees "double-digit" growth in 2024 despite cloud digestion, lower visibility, and enterprise budget concerns.
The analyst expects ANET to continue to gain shares in the Enterprise Switching market (~16% share by 2027 from ~10% share in 2022), led by AI.
The analyst estimates revenue and EPS of $5,724.0 million and $6.08 in FY23, $6,125.1 million and $6.38 in FY24 and $6,905.2 million and $7.27 in FY25, respectively.
Also Read: Arista Networks Shows Strong Growth Engine in 2Q23, Fueled by Enterprise Demand Surge: Analysts
Price Action: ANET shares are trading lower by 4.32% at $186.31 on the last check Wednesday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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