Morgan Stanley Downgrades Telecom & Networking Industry, NetApp, Hewlett Packard Stocks
Morgan Stanley analyst Meta Marshall downgraded her industry view on Telecom & Networking Equipment to Cautious from In-Line with enterprise data points weakening and the dollar strengthening.
Given their backlog, Marshall saw equipment and storage companies to "sound good" on the calendar Q1 earnings call.
Marshall saw signs of weakness accumulate, particularly a more cautious flash survey on hardware and, most notably, reseller checks pointing to softer second-half pipelines.
Marshall downgraded NetApp Inc (NASDAQ: NTAP) with a price target of $91 (18% upside), citing a challenging near-term setup.
Marshall downgraded F5 Inc (NASDAQ: FFIV) to Equal Weight with a price target of $250 (10.5% upside), removing it as Top Pick.
She downgraded Hewlett Packard Enterprise Co (NYSE: HPE) to Underweight with a price target of $15 (5.2% downside).
While the current valuation of HP Enterprise is "not challenging," she saw the stock underperform over the next 12 months given a combination of weak CIO data, value-added reseller commentary, 60% of revenue coming from servers/storage, and the company's European concentration.
She also slashed the price targets for several others in the space.
Price Action: HPE shares traded lower by 1.21% at $15.62 on the last check Tuesday.
Latest Ratings for NTAP
Mar 2022 | Barclays | Upgrades | Equal-Weight | Overweight |
Feb 2022 | Wells Fargo | Maintains | Equal-Weight | |
Feb 2022 | Deutsche Bank | Maintains | Hold |
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