RBC Capital cuts Adaptec Inc. (ADPT ) to underperform from sector perform.
Analyst Thomas Curlin says company notes that enterprise drive shortages have negatively affected demand for its SCSI-related products from its OEM and channel customers.
He says the company believes drive shortage will not only impact demand in fourth-quarter fiscal 2005 (ending March) but could also impact first-quarter fiscal 2006. As a result, he cuts his 2007 fiscal 2005 earnings per share estimate to a 4-cent loss and his 24 cents fiscal 2006 estimate to a 20-cent loss.
Curlin cuts his $6 target to $4. He keeps above average risk assessment on a 12-month basis due to excess net cash balance and about $1.50 per share. He estimates $3.50 per share is a current fair value.