DownSouth, Hi! PaineWebber Raising Price Target on NTAP
Here's the latest report from analyst Don Young at PaineWebber on NTAP courtesy of "hittinreload" on the Yahoo thread. As you know, Don garnered a lot of press (and heat from EMC) when he issued a neutral rating yesterday on EMC.
Best,
Duncan
SERVER AND ENTERPRISE HARDWARE
Don Young
203-978-9100/donyoung@painewebber.com
RESEARCH NOTE
Hank Hagey, Associate Analyst (203-978-9110)
November 5, 1999
Network Appliance Rating: Buy (NTAP-$86.00)
Network Appliance: Raising Price Target
KEY POINTS
· We are raising our 12-month price target on NTAP shares to $120/share, or about 120x our CY2000 EPS estimate of $0.98/share. Leading technology names continue to sell at multiples of 2 or more times their growth rates, and Network Appliance is the clear leader in the network-attached storage market. With a growing internet-caching business, NTAP's association with the Internet is also building fast.
· The momentum of the “appliance” story is growing, as the advantages of being a single-purpose appliance company are clearly bearing fruit. The so-called competition from either low-end internet appliance companies or the mainstream system vendors has not materialized into any meaningful threat. We plan on staying with the NTAP story as long as the fundamentals remain robust – our concern for valuation will remain limited.
Key Data Quarterly Earnings Per Share (fiscal year ends April)
52-Wk Range $86-28 1999A 2000E Prev 2001E Prev
Eq.Mkt.Cap.(MM) $6,364 1Q $0.10 $0.16A
Sh.Out.(MM) 74 2Q 0.11 0.18E
Float 62% 3Q 0.12 0.19E
Inst.Hldgs. 68.0% 4Q 0.13 0.22E
Av.Dly.Vol.(K) 843 Year $0.46 $0.74 $1.05
Curr. Div./Yield None/NA FC Cons.: $0.46 $0.72 $1.03
Sec.Grwth.Rate 50% Revs.(MM): $289 $499 $823
12-mo. Tgt Price $120.00 P/E: 187.0x 116.2x 81.9x
12-mo. Ret. Pot'l 39.5%
Convertible? No
RISKS
Investing in technology stocks involves a high degree of risk because of rapid changes in technology and competitor actions.
Additional information available upon request.
2. PaineWebber Incorporated makes a market in this security. The information contained herein is based on sources we believe to be reliable, but its accuracy is not guaranteed. PaineWebber Incorporated and/or Mitchell Hutchins Asset Management Inc., affiliated companies and/or their officers, directors, employees or stockholders may at times have a position, including an arbitrage or option position, in the securities described herein and may sell or buy them to or from customers. These companies may from time to time act as a consultant to a company being reported upon.
Copyright © 1999 by PaineWebber Incorporated, all rights reserved
Network Appliance, Inc. designs, makes, markets and supports high-performance network data storage devices which provide fast, simple, reliable and cost effective file service for data-intensive
network environments. |
