Unterberg Lowers McData to 'Market Perform'
Unterberg downgraded McData (MCDTA ) to market perform.
Analyst Sue Mark says although near-term revenue guidance for the third quarter is in line with recently reduced estimates, it remains below her consensus view. Also, she notes some may be somewhat disappointed by second-quarter results, which were a tad below the midpoint of prior guidance. Additionally, the company announced two acquisitions.
With increased execution risk, Mark believes shares are not likely to outperform the peer group. However, her long-term rating remains buy. She says McData remains dominant player in the director switch market, and continues to have product momentum with its family of Sphereon switches.