- 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.
