Salomon Downgrades McData to 'Neutral'
Salomon Smith Barney cut McData (MCDTA ) to neutral from outperform.
Analyst H. Clinton Vaughn says he is downgrading on the company's recent fundamental weakness, which he believes is company-specific, not industry- related. He says he thinks Broadcom's rapid migration to 2Gbps, enterprise networking markets has exerted competitive pressure on McData's results. He says one could also speculate that McData's shortfall is due to weakness at its largest customer -- EMC, but his industry checks show EMC's fundamentals gained strength throughout March, which is contrary to what he thinks McData experienced. He cut his $13 target to $9.