BMO Maintains Market Perform On Brocade Communications, Raises PT To $12.50

BMO analyst Keith Bachman maintained a Market Perform rating on Brocade Communications (NASDAQ:BRCD) and slightly raised his price target to $12.50 (from $12.00), following the company’s recent earnings results, posting revenue of $564 million that was about in-line with BMO’s estimate, though the revenue mix was different than the analyst’s assumption.

Bachman commented, “Given increased confidence in IP growth prospects, we are raising our P/E target multiple from 12x to 12x-13x our FY16 EPS estimate. As a result, we are raising our target price from $12 to $12.50, or an EV/FCF of 11x-12x our FY16 estimate.”

“Given less than 20% potential upside relative to our new target price, we stay Market Perform. However, if BRCD can generate and sustain IP revenue growth in the high single digit range, then our target multiple has further upside tension.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Keith Bachman has a total average return of 28.6% and a 73.1% success rate. Bachman has a average return when recommending BRCD, and is ranked #21 out of 3385 analysts.

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