Analysts at Oppenheimer and Morgan Stanley are lukewarm on Brocade Communications Systems, Inc.'s (NASDAQ: BRCD) earnings beat. The company reported solid results with “strong margins,” according to Morgan Stanley. But, though the two firms come to the same conclusion that Brocade will not outperform, they do not get there the same way.
For instance, Oppenheimer said, “SAN continues to struggle to show consistency.” According to Morgan Stanley, “SAN drives upside.”
But despite strong execution last quarter, both Morgan Stanley and Oppenheimer expect Brocade to perform in line with the S&P 500 over the next 12-18 months. Morgan Stanley has a $13 price target on the stock, up from $11 previously, based on a higher multiple that is in line with the company’s peers.
Brocade was down nearly 5 percent at $11.96 on Friday.
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