Shares of Brocade Communications (BRCD) are tumbling in the wake of last night’s first-quarter revenue miss. Today both Goldman Sachs and S&P Equity Research downgraded shares of the data center play.
Goldman Sachs analyst Min Park lowered the stock to Neutral from Buy and cut Brocade’s price target to $6.50 from $8, citing uneven execution, potential for weakness in Brocade’s storage networking segment and lack of near-term catalysts.
At S&P, analyst Jim Yin slices Brocade’s price target by $2 to $5.50 and lowers shares to Hold from Buy. Yin notes that a rebound in Brocade’s ethernet business was more than offset by the decline in data storage revenue.
Shares of Brocade are off 10.7%, or 63 cents, to $5.24.
Update: Canaccord Genuity thinks the selloff has created an attractive opportunity. Analyst Paul Mansky this afternoon upgraded the stock to Buy from Hold. Mansky says the second quarter holds questions related to seasonality, competition, Europe and OEM inventories. But, “we view the challenges as fully discounted, leaving attractive returns over the 6- to 12- month horizon,” he writes in a note.
