WRAL Tech Wire

NetApp shares, ratings soar in wake of failed Data Domain deal

RESEARCH TRIANGLE PARK, N.C. – Despite some predictions to the contrary, NetApp has apparently emerged stronger than ever after failing last month in its bid to acquire Data Domain.

The California-based storage technology firm, which has a major campus in the Triangle, is riding high on a stock surge driven in part by a series of upgrades by industry analysts. NetApp (Nasdaq: NTAP) shares reached $23.56 on July 28 before closing at $22.51 on Monday.

In May, as the bidding for Data Domain between NetApp and EMC was heating up, NetApp traded at $16.93.

On Monday, Jayson Noland at Robert W. Baird & Co. upgraded NetApp’s share target price to $27 per share. According to Channel Reseller, Noland said “field checks continue to list NetApp as the leader in important growth categories” even though NetApp was “getting better” at competing.

Other upgrades for NetApp:

July 17, MKM Partners, “neutral” to “buy”

July 21, ThinkEquity, “source of funds” to “accumulate”

July 23, Piper Jaffray, “neutral” to “overweight”

A breakdown on analysts rankings by Thomson/First Call continues to show a strong liking for NetApp:

Strong buy: 5

Buy: 6

Hold: 18

Underperform: 2

Sell: 0

When NetApp dropped out of the Data Domain bidding, some analysts speculated that the company could be a takeover target itself. However, others have said NetApp made a wise choice to let EMC top $2 billion in bidding.

A solution provider and NetApp partner told ChannelWeb that he likes where NetApp stands now.

"It was a prudent business decision for NetApp to drop its Data Domain bid," Rolf Strasheim of Peak-UpTime said. "And a prudent decision for its partners. I like the fact that NetApp saved $2.1 billion, and that EMC overpaid for Data Domain."

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