This cloud data stock can jump nearly 20% thanks to a new company playbook, Stifel says
An improved company playbook can help NetApp outperform going forward, according to Stifel. Stifel upgraded the stock to buy from hold with a $75 price target, which represents 19% upside from Thursday's close of $63 per share. NetApp , a cloud storage provider that also provides physical hardware to other companies, is in the middle of a shakeup that could lead to more earnings per share and larger margins, analyst Matthew Sheerin wrote Sunday. Sheerin said the firm conducted meetings with NetApp where executives detailed several initiatives, which include layoffs to 8% of the workforce and reorganizing the company's sales strategy, to weather broader market headwinds. "We came away from the meetings more confident in our FY24 estimate -- $5.49 -- which reflects a soft 1H but a return to sales and EPS growth in 2H24," the analyst wrote. Shares of NetApp closed at $63 on Thursday and have added nearly 5% in 2023. Stifel added that the shakeup to NetApp's sales team encompasses employees being assigned to specific products and sectors to better communicate with customers on their specific needs. NTAP YTD mountain NTAP in 2023 Other company efforts to improve its outlook include improved hardware supply that will improve margins as well as the recent plunge into products that employ quad-level cell flash memory, which is the highest capacity available, which could help improve the company's market dominance. "We view the current risk-reward set up as compelling as NTAP continues to expand its product portfolio and believe the current valuation gives the company little credit for its company-specific initiatives," Sheerin said. — CNBC's Michael Bloom contributed to this report.