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Nov 13 (Reuters) - Two brokerages cut their price targets on NetApp Inc (NTAP.O) after the data storage maker said it would not offer an outlook for the third quarter, citing the economic uncertainty.
“While NetApp shied away from giving formal targets for the January quarter and fiscal 2009, we think the company provided enough information to cause consensus estimates to move sufficiently downward for the stock to start working again,” Goldman Sachs said.
The company, which reported second-quarter results ahead of Wall Street expectations, said on Wednesday it expects non-GAAP gross margins for the third quarter to be substantially at the same level sequentially.
“With NetApp shares thoroughly washed out, we think more realistic expectations for near term results should help the stock rebound off depressed levels,” said Goldman, which cut its price target to $13 from $15 on the stock.
The company’s shares, which had shed 58 percent so far this year, jumped as much as 17 percent on Thursday.
Goldman, which has a “neutral” rating on the stock, said NetApp is at least ahead of its peers in adjusting for the current market, which should allow it to perform better relative to expectations.
The company also said it sees non-GAAP operating expenses for the third quarter to be roughly flat sequentially.
“Overall, NetApp is executing well and remains an exceptionally strong and well managed company,” said Needham & Co, which cut its price target to $16 from $25 but kept its “buy” rating on the stock.
Shares of the company rose to a high of $12.12 before paring some gains to trade up 11 percent at $11.52 Thursday morning on Nasdaq. (Reporting by Purwa Naveen Raman in Bangalore; Editing by Deepak Kannan)